Many Tri-State homes may be underinsured

CINCINNATI - It's been a bad year for homeowners, with hurricanes and wildfires. If disaster strikes and destroys your home, there could be another disaster lurking - your insurance company may not pay enough to rebuild.

Sixty-four percent of American homes are underinsured, according to a California company that tracks rebuilding costs.

Our partners at Consumer Reports Magazine have important advice to help guard against the unpredictable.

Insurance many not cover all damage

A freak windstorm toppled a huge tree onto a home recently, damaging the roof, siding, and interior. The homeowner isn't sure how much his insurance will cover.

"There is so much damage done. You have no clue really what the internal damage is," said Michael Matra.

Consumer Reports Money Adviser said for peace of mind, it's crucial to review your policy.

"Damage by high winds may be subject to a steeper deductible than other types of damage. And your insurance may not cover earthquakes, or landslides, or floods at all," said Consumer Reports Money Adviser Tobie Stanger.

Consumer Reports advises looking into federal flood-insurance programs, even if you live in a low-risk area.

Falling home values

One of the biggest problems is falling home values, in the Cincinnati area and elswhere.

Your home may be currenlty valued at far less than the cost to rebuild it.

"It's very important to make sure that you've covered the house for the full replacement value in case you have a total loss. But don't use the sales price as a measure. These days that might not be enough to cover rebuilding," said Stanger.

For just a few dollars on the website AccuCoverage, you can figure out a realistic replacement estimate yourself. But be sure to include the cost of replacing any custom items like tiles, special flooring, and fixtures.

"Choosing an insurance company requires research, not just to find the best price but also to check out the financial health of the company," said Stanger.

To make sure the company is solvent and will be able to pay your claim, check the website thestreet.com . Stick with companies rated "A" or "B."

Matra picked an established company, and is happy he did, as he has already received a check to begin the repair work.

Consumer Reports said while you're sizing up the best coverage, also keep in mind that rates can vary widely. You can compare rates at Insure.com, InsWeb, and NetQuote.

As always don't waste your money.

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