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3 Things You Need to Know About Homeowner’s Insurance

Six Shooter Flood
Image by ecstaticist via Flickr

If you are a homeowner, you need homeowner’s insurance. Period.   Protecting what is mostly likely the biggest investment of your life with a relatively small monthly payment is so important, that, if you disagree, I’m afraid we are so fundamentally opposed on the most basic elements of personal finance that nothing I say will register with you.

If, however, you have homeowner’s insurance, or–through some innocent lapse–need homeowner’s insurance and you just want some more information, welcome!

The basic principle of insurance is simple.  You bet against the insurance company that you or your property are going to get hurt.  If you’re right, you win whatever your policy limit is.  If you’re wrong, the insurance company cleans up with your monthly premium.  Insurance is gambling that something bad will happen to you. If you lose, you win!

Now, there are some things about homeowner’s insurance that you may not realize.

1.  Homeowner’s insurance will not protect you against a flood. For that you need flood insurance.  The easiest way to tell which policy covers water damage is to see if the water touched the ground before your house.  An overflowing river, or heavy rain that seeps through the ground and your foundation are both considered flooding.    On the other hand, hail breaking your windows and allowing the rain in or a broken pipe are both generally covered by your homeowner’s policy.

Do you need flood insurance?  I would say that, if you live on the coast below sea level, you should have flood insurance.  If you’re on a flood plain, you need flood insurance.   If you’re not sure, use the handy tool at http://www.floodsmart.gov to rate your risk and get an estimate on premium costs.   My home is in moderate-to-low risk of flooding, so full coverage starts at $120.

2.  You can negotiate an insurance claim. When you have an insurance adjuster inspecting your home after you file a claim, most of the time they will lowball you.   Generous adjusters don’t get brought in for the next round of claims.  If you know the replacement costs are higher than they are offering, or even if you aren’t sure, don’t sign!   Once you sign, you are locked into a contract with the insurance company.  Take your time and do your research. Get a contractor out to give you a damage estimate, if you can.

3.  Your deductible is too low. If you’ve built up an emergency fund, you can safely boost your deductible to a sizable percentage of that fund and save yourself a bunch of money.    When we got our emergency fund up to about $2000, we raised our deductible from $500 to $1000 and saved a couple of hundred dollars per year.   That change pays for itself every 2 years we don’t have a claim.  I absolutely wouldn’t recommend this if you don’t have the money to cover your deductible, but, if you do, it can be a great money-saver.

Bonus tip: If you get angry that your homeowner’s insurance doesn’t cover flooding, even if you haven’t had to deal with a flood, and you cancel your insurance out of spite, and you subsequently have a ton of hail damage, your insurance company won’t cover the crap that happened during the window where you weren’t their customer.

Are you one of the misguided masses who prefer to trust their home to fate?

Do you have an insurance horror story?

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Sunday Roundup

Eye of horse.
Image via Wikipedia

My girls have been riding in horse shows lately.  Sometimes, it seems like that’s all we’ve been doing on the weekends, but they love it.  My wife’s favorite hobby now matches my daughters’ favorite pastime.   As a bonus, we’ll never have to paint their room again, with the way they are accumulating ribbons.

Best Posts

It is possible to be entirely too connected.

My life is now complete.  It’s possible to buy 95 pounds of cereal marshmallows for just $399.   Breakfast at my house just got perfect.

I wholeheartedly agree with Tam, “You don’t need to make any excuses for crashing things into each other at the speed of light in an underground tunnel longer than Manhattan that’s had the air pumped out and been chilled to a couple degrees above absolute zero. That doesn’t need a reason. “

Carnivals I’ve Rocked 

Credit Cards: My Failed Experiment was included in the Best of Money Carnival, the  Carnival of Wealth, and the Totally Money Blog Carnival.

My niche site article on how to Make Extra Money with Keyword Research was included in the Totally Money Blog Carnival.

Thank you! If I missed anyone, please let me know.

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This Year’s Richest Kids

For teenagers in Hollywood, life is good if you are one of the top paid actors in the industry. While some people work their entire lives to become financially stable and have a life of luxury and glamor, it comes young for these actors and can be a whirlwind of opportunity. Here is a list of some of the richest and most famed teenage celebrities of 2013.

English: Justin Bieber at the Sentul Internati...
English: Justin Bieber at the Sentul International Convention Center in West Java, Indonesia (Photo credit: Wikipedia)
Elle and Dakota Fanning
It’s hard to believe that Dakota Fanning is still in her teen years considering she’s been working in Hollywood for nearly a decade now. However the teen actress still continues to demand big bucks for the big roles that she plays. This helped pave the path for her little sister, Ellie, who has been in a handful of scary movies like “I Am Sam” and “Super 8”. Together the sister’s net worth is over $20 million. And while most of that is accredited to Dakota, Ellie is starting to pull her own weight as she becomes more popular.Willow and Jaden Smith
Another set of siblings makes the list with Willow and Jaden Smith. Granted these two have had a lot of help and opportunity from their Fresh Prince father, but they are sure to keep the ball rolling on their own. The two have both already made their debut on the big screen, have had popular top-radio songs, and continue to diversify with their ventures. With the knowledge they get from their father, the Smith siblings are sure to continue to rack in the paychecks for the remainder of their teen years and beyond.Angus T. Jones
Everyone’s favorite “half-man” from the TV series Two And A Half Men makes the list of highest paid teens, even after he left the TV show in 2013. In 2010, Jones became the highest paid child actor at the ripe age of 17, as he penned a contracted that would earn him nearly $8 million over two years of work. No longer apart of the show, Angus T. Jones looks to find another break that will continue the success he found at such a young age.

Selena Gomez
The last year and a half has been huge for the former Disney Star. While some actors and actresses have a hard time shedding the Disney persona, Gomez has now branched out to more mature film roles and has become a legitimate player in the music industry as well, picking up Choice Break-Up Song and the Choice Music Star and the Choice Hottie Teen Choice awards.  As her fame continues to grow, she also works closely with UNICEF and other non-profit organizations, proving that it doesn’t matter how much money you have, you can always do the right thing.

Miley Cyrus
This is the last year that Miley will be able to make the list of wealthy teens, but she is sure to continue to rack in the paychecks even as she enters her 20’s and beyond. A dual threat in singing and acting, she’s another Disney star that has shed the child–star persona and has developed her own new edgy look and identity. And even though she may no longer be the innocent Hanna Montana that she once was, she still keeps her fans entertained and interested with everything she works on.  She picked up three Teen Choice Awards this year.

Justin Bieber
You better believe that the Beebs is on this list. Possibly the most loved/hated teenager in Hollywood, Justin Bieber continues to rake in the money that his ‘Beliebers’ shell out to see him in concert, listen to his music and buy his merchandise. You may love him, you may hate him, but either way he’s probably making more money than you and he’s having a great time doing it.

Some teens stars make more money in a year than majority of people will make in their entire lifetimes. This affords them opportunities of a lifetime to enjoy things other people only dream of. But as quickly as they become part of the limelight, new faces appear and take their place. These are some of the hottest faces of 2013, but who will be here next year?

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PRISM: Did the NSA kill privacy?

The seal of the U.S. National Security Agency....
The seal of the U.S. National Security Agency. The first use was in September 1966, replacing an older seal which was used briefly. For more information, see here and here. (Photo credit: Wikipedia)

Revelations have been continuing to emerge regarding widespread surveillance tactics being internationally deployed by the United States government. PRISM is the codename of the project, which was implemented by the Protect America Act of 2007 that President George W. Bush signed. Their data collection activities remained obscured for years until a contractor employed by the National Security Agency leaked internal documents regarding the invasive system to the public.

The Scope of Surveillance

Because the intrusive monitoring is being conducted under a shroud of secrecy, it is difficult to estimate the magnitude of governmental spying. Federal agents have direct access to any online conversations conducted between Americans and international locations. These authorities have permission to conduct individual surveillance operations on any person for up to seven days before they need to acquire an official warrant. This scenario indicates that the guise of personal privacy has expired.

Logistics Versus Application

The details that have been released about the program illustrate serious setbacks for privacy activists. Fortunately, the public population vastly outnumbers the amount of authorities with access to these surveillance capabilities. Statistically, this means that that are far too many people to be personally tracked. In all likelihood, most people have not been targeted for individual monitoring; however, the story creates an appearance of governmental omnipresence that instills a need for self-censorship. The exposé about wiretapping operations simply confirms the common knowledge that the expression of incendiary rhetoric is dangerous in any arena. It would be naïve to believe that records of online activities were not being stored before the government had access to them. The permanent imprints of internet use were always available; therefore, it was only a matter of time before the legal authorities started accessing the material.

Unequal Privacy

Technically, the surveillance measures have institutionalized extreme privacy for the secret courts that have legalized extensive wiretaps. The United States Foreign Intelligence Surveillance Court operates in a completely classified fashion. They issue rulings that have fundamental impacts on American democracy, but they only conduct closed hearings. Additionally, they issue secret rulings that form the basis of laws that citizens do not know about. The court is comprised of heavily partisan members. This is based on the fact they are all appointed by John Roberts, the Chief Justice of the Supreme Court. Only one appointee was not a Republican, but the FISA Court is so concealed from the general public that conflicts of interest cannot be thoroughly vetted. These judges are privy to unfettered secrecy while they simultaneously deny the public of rights to their own privacy.

Public Backlash

Privacy still exists, but it has been neglected in favor of flashier technologies that are not secure. Fortunately, people have started returning to conventional methods of communication, which cannot be easily traced. Several organizations are developing secure ways to conduct discrete transactions online, and physical cash may now avoid its inevitable obsolescence. Ultimately, these startling announcements about governmental eavesdropping are generating a resurgence of non-digital media to regain privacy in all interactions.

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