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Suze Orman Money Matters

Suze Orman, Money Matters

Homing In on the Right Insurance Coverage

by Suze Orman

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Posted on Friday, November 16, 2007, 12:00AM

The devastating wildfires in Southern California last month offered a stark reminder: You need to make sure your homeowner's insurance policy will truly protect you and your family if your home is seriously damaged or destroyed.

Insurance Is No Assurance

Don't automatically assume you're protected -- according to one national survey, nearly 60 percent of homeowners are seriously underinsured. In the event of a major claim, the survey showed that the underinsured could find that the upper limit of their policy payout is 20 percent less on average than what they need to rebuild in today's market.

In other words, for every dollar needed to rebuild or repair a damaged home, the policy would only kick in 80 cents. That leaves the underinsured homeowner on the hook for the remaining 20 cents.

So don't be cavalier here. Just because you have a homeowner's insurance policy doesn't mean you have the right one. The difference between the right one and the wrong one could mean tens of thousands of dollars coming out of your pocket because you find out too late that your insurance policy is inadequate.

The Coverage You Need

To avoid that costly mistake, here are the key elements you need to make sure are included in your homeowner's insurance policy:

• Extended replacement cost coverage

More and more insurers are offering this as standard coverage, but make sure that you have this level of protection. With extended replacement cost (ERC), the maximum policy payout for a covered loss can exceed the stated limit on the policy by 25 percent or more.

For example, if your dwelling limit coverage is $300,000 and your ERC coverage entitles you to a maximum payout of 125 percent of your stated policy limit, you could in fact receive a total payout of as much as $375,000 ($300,000 x 125 percent) for a covered loss. Given how construction and material costs are constantly on the rise, having this extra padding in your policy provides a great cushion against unanticipated building costs.

It's important to realize that even with ERC you could be underinsured if your insurance agent didn't properly value your home when the policy was first drawn up. The best way for an insurance agent to make sure any and all special features of the home are accounted for is to base the policy on a full appraisal.

The Ultimate Insurance

One caveat regarding ERC: If you decide you don't want to rebuild on your property, your maximum payout will typically be limited to either the depreciated value of your home (known as "actual cash value," or ACV), or just 100 percent of your stated policy coverage. Even if you have ERC coverage, insurers usually won't release any funds beyond 100 percent of the policy limit if you plan to build elsewhere.

With that in mind, ask your agent if there's any chance that you can obtain a guaranteed replacement cost policy. As the name implies, with this level of protection your policy will pay whatever it takes to rebuild or repair your home to its pre-loss state, regardless of how much it exceeds the stated dwelling limit coverage on your policy.

For obvious reasons, fewer and fewer insurers offer this gold standard of coverage. But if you can in fact find an insurer willing to give you a guaranteed policy, it's the ultimate in home insurance.

No Skimping Allowed

On the other end of the protection pendulum, if you pull out your policy and see that your coverage is for replacement cost or pays only ACV, stop reading right here and upgrade your insurance immediately. I can't stress enough how seriously underinsured you are. In the event of a major loss, I can pretty much assure you that your policy will fall way short of what you need to repair or rebuild.

To be honest, I'd think twice about working with any insurance agent who sold you a policy with replacement cost or ACV in the first place; it's a huge yellow light to me that the agent didn't really work to protect you when you first purchased the policy.

Then again, you may be to blame as well if you simply asked for the cheapest coverage possible. Protecting your home is simply not a place to skimp.

Keeping Up with Change

After ERC, the next two items on your list of coverage must-haves are:

• Automatic inflation guard

Verify with your insurance agent that your policy includes an automatic inflation adjustment guard. This will increase your coverage limit each year to help you stay in line with rising building and material costs in your area. If it isn't part of your standard policy, insist that it be added as an endorsement.

Also remember to contact your insurance agent to update your coverage limits after any major renovation project. You want to make sure that your policy would repay you to rebuild your home up to your current standards; if you just replaced a 1970s kitchen with a 2007 state-of-the-art one, you want your insurance to cover the cost of replacing the current kitchen.

• Building code endorsement

If you live in an older home, ask for this extra endorsement to your policy. It will cover new construction costs associated with meeting current building code regulations if your home is severely damaged or destroyed. This extra coverage isn't a standard part of your policy -- even if you have ERC -- so make sure it's added.

Where Will You Live?

Finally, your policy should include:

• Additional living expense

In the event that your home is destroyed or needs repairs that make it impossible to live in, you'll naturally need to live someplace else during the rebuilding or repair. How much your insurance policy will pay out to cover these temporary living costs depends on your level of coverage.

Pull out your policy and look for the heading "Part D: Loss of Use/Additional Living Expenses." Typically, your coverage will be stated as a percentage -- generally 20 percent to 50 percent -- of your dwelling limit coverage. For example, if you have a $300,000 policy with a 20 percent additional living expense (ALE) coverage, you'd be entitled to a maximum of $60,000 for additional living expenses.

You also want to check what the time limit is for how long you can draw on this coverage. It's typically 12 months, but can be longer. Some policies state "a reasonable period of time necessary to replace or rebuild your home." Given how long it can take to rebuild after a major loss, I strongly suggest seeing if you can obtain a policy with the most liberal coverage for ALE.

Even if your home is destroyed tomorrow, you still need to keep current with your mortgage payments. That means you could be saddled with your old housing costs as well as your new (temporary) housing costs, which is why you need the best ALE coverage possible. You don't want to feel pinched.

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48 Comments

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  • Yahoo! Finance User - Friday, November 30, 2007, 10:11AM ET  Report Abuse

    • Overall: 4/5

    Suze, don’t forget renters insurance! I agree with you that many homeowners are underinsured but at least have they have something. Far too many renters are there are walking around with no renters insurance, and they are under the assumption the landlord will cover everything! Not true. I work as a financial advisor for young professionals and always recommend having a plan as young as possible. Before young adults even start thinking about savings and investments, I suggest they ask themselves: What if something were to happen to me, or my place of residence, that could threaten my financial security? Whether you're envisioning a fire, burglary, or major health issue, the best way to safeguard your current financial position against such surprise events is to buy insurance. Of course everyone knows the obvious must-haves like health or car insurance, but a much more overlooked must have insurance is renters insurance. Most people just starting out do not own homes, but that does not mean that their belongings are any less valuable. And contrary to popular belief, landlords are not responsible for any of your valuables ruined in a fire, or stolen during a break-in. Renters insurance also covers your valuables when you are traveling. Should your car get broken into, or your luggage and/or expensive equipment lost during vacation, you can recoup any losses with a renters insurance policy. Since policies are extremely easy to come by and cost about the price of a pizza per month, there’s little excuse not to get one. You can search online for a policy but a pretty cool website is Liberty Mutual’s www.youcovered.com, because you can get a free quote without putting in any personal information.

  • Yahoo! Finance User - Thursday, November 29, 2007, 11:22PM ET  Report Abuse

    • Overall: 2/5

    A Few Points From A Licensed Insurance Agent: *Homeowners insurance is based on Replacement Cost not Market Value *Many people decide not to insure to the companies recommended limits to save afew pennies when you could simply raise your deductible rather and save more. *Personal items such as watches, jewelry and furs are generally covered for only $1500 for loss by theft. You can purchase additional coverage for a resonable fee *The argument "If my house was burned down I wouldn't want to rebuild to the same size" really is pointless. The purpose of insurance is indemnity "getting you back where you were" period. *You may not like paying for insurance, I don't either and I'm an agent, however, it is a blessing when you have that burst pipe or you have a fender bender. Deal with it people *As for water damage: water coming in from the outside NOT COVERED. That's a flood regardless of where you are *Bottom line - it is every consumers responsibility to know what they are covered for an insurance policy is a contract READ IT - you get what you pay for you won't get Nordstrom service at Wal*Mart prices people.

  • Yahoo! Finance User - Tuesday, November 27, 2007, 10:49PM ET  Report Abuse

    • Overall: 2/5

    Normally the stuff this woman writes is worthless. However this time I am glad to see she hired someone to write her column that knows what they are talking about. The most important fact in this article is in reference to having an Insurance Agent. This article shows why it is so important to have a yearly or an every 2 year insurance review of all your policies. The insurance companies purpose is to assess risk, rate accordingly and pay claims. The Agent is here to make the customer happy, however it is the Customers job to discuss what it is that you want insurance to cover, and if your policy is going to cover it. Don't assume you have a coverage if you don't know what your policy is covering. Go with an agent of a single company, usually one who is rated in size among the top 5 in your state. Don't go with a broker or a website, because the broker won't know the ins and outs of the policies of all companies they represent, they will only shop for the best price for you. The fly by night insurance companies on the internet, don't post their policies online before you buy, you're only buying a price for what you hope is covered. Remember there are 3 things most consumers want when they are purchasing, Service, Coverage, and Price. No company out there can give you the best of all three, so next time you go shopping, which one of the 3 are you willing to sacrafice?

  • Raiddinn - Sunday, November 25, 2007, 10:25AM ET  Report Abuse

    • Overall: 1/5

    Suze is good at trying to screw over the insurance industry. I am surprised at how - this time - she is changing her story. When it comes to insurance, you get what you pay for. If you want the lowest rate (maybe 5% buy on quality, but 95% buy on price) then you get the worst coverage. This is not rocket science people. If you want to pay for $50,000 of coverage and you want to get $500,000 of coverage, then you are being unreasonable. Most insurance companies are for profit companies and they intend to profit from you. They end up with about 5 cents on the dollar or so when all is said and done. If your insurance company's actuary's suck, and they write coverage such that you pay for 250k coverage and you get 500k coverage (what you are looking for) then its going to show up in the numbers on the back end real fast (as in they are going to pay twice as much out as they take in) and soon they will start denying claims even when their contract says they should pay it out. Again, this isn't rocket science. On the other hand, companies that charge you for 500k when you want 500k are the ones that are generous with payouts. Its the people that screw themselves over always trying to get the lowest price for everything. Stop blaming it on the Agent or the Broker or the Company. For the record, I don't own a home nor have I ever been part of writing insurance coverage. Raiddinn

  • NathanW - Wednesday, November 21, 2007, 10:24PM ET  Report Abuse

    • Overall: 1/5

    Absolutely out of her league. Why does she waste her time advising people about coverages when she is not trained or licensed to do so. What is wrong with replacement cost when most policies have a PIA increase built into them This automatically increases cost after factoring in building cost in particular zipcodes. Insurance is based on actuaries. Nothing more, nothing less. People do not like insurance until they need it. People...insurance purchasers...not insurance companies are the reason why claims are denied. I cannot begin to count how many fraudulent claims are handled daily by insurance companies. I am proud the company I represent vigorously investigates and does not pay out on every claim. This is what makes a company stronger, so in case their is a huge catastrophie, it will have enough money to pay out all the claims. If their was not any fraud, their would not be any lawyers. Their would not be any claims investigation. My advice. Read your policy. Insurance indemnifies you. It is not their for people to make a profit. As an agent, people come to me needing insurance. I give them recomendations, they don't want to pay for the amount of insurance they need, they leave, go down the road and buy a policy thats "cheaper" beacuse it under insures them. For example. Purchase price $100k. Replacement cost $150k. Consumer: I want $100k. I say: our policy will not be adequate to replace you house if it is a total loss. ($10k land value). Consumer: I don't want to pay the extra $80 dollars a year. I say: you need to go somewhere else.....they leave. A ploicy states...THIS POLICY DOES NOT HAVE FLOOD COVERAGE... A flood comes and they cry because it isn't covered. People. You get what you oay for and you reap what you sow.

  • ERIK - Tuesday, November 20, 2007, 8:35PM ET  Report Abuse

    • Overall: 1/5

    Interesting the Orman wants you to get 125% coverage on house, but when it comes to Life Insurance she wouldn't recommend the same thing.

  • RandallL - Tuesday, November 20, 2007, 6:50PM ET  Report Abuse

    • Overall: 1/5

    As usual you make blanket statements. Each individual has a different need and your advice could be good, could be bad, or it could be really terrible.

  • AsmirHab - Tuesday, November 20, 2007, 6:05PM ET  Report Abuse

    • Overall: 4/5

    This is a timely article. Keep up the good work.

  • Yahoo! Finance User - Tuesday, November 20, 2007, 3:21PM ET  Report Abuse

    • Overall: 3/5

    As a financial planner I believe it's never a bad thing when you get folks to think about their insurance coverage. I do however feel that more important than ERC versus replacement value is to know for what perils you are covered. While talking with your insurance agent, ask whether you have a named perils or named exclusion policy.

  • James E - Tuesday, November 20, 2007, 3:02PM ET  Report Abuse

    • Overall: 5/5

    These "One-Star" minded people should really avoid giving their opinions...the useless banter is unnecessary for sure. As usual, Suze does provide common-sense information to the masses. Thanks.

  • Yogesh - Tuesday, November 20, 2007, 11:09AM ET  Report Abuse

    • Overall: 4/5

    This couldn't have come at a better time. Very informative. I wonder how much my insurance agent will increase my poilicy to get to the suggest level of coverage.

  • Wick - Tuesday, November 20, 2007, 10:16AM ET  Report Abuse

    • Overall: 1/5

    You should first worry about homing in on the right haircut sour pus

  • Yahoo! Finance User - Tuesday, November 20, 2007, 9:10AM ET  Report Abuse

    • Overall: 1/5

    I work in the insurance industry and happen to think this article is very poor. I'm not convinced that Suzy knows much about a standard Homeowners policy. To suggest that an agent is questionable if they offer a replacement cost policy is absurd. Most standard insurance policies insure the home with replacement cost and come with an inflation guard endorsement (at least my company does). This should be sufficient, and anything more is generally overinsurance. Furthermore, an ERC endorsement is only necessary in homeowners markets where building costs exceed inflation rate. These markets are hard to find these days. Also, its rare to find any company selling ACV Home insurance policies. Oh, and about that upgraded kitchen that she talks about, your dwelling amount on your policy includes the cost to replace your entire home. Therefore, the amount already accounts for the cost to upgrade. Only when the cost of the upgraded kitchen brings your replacement cost above the amount on your insurance policy do you need to increase your insurance amount. The long and short of it is this: Most policies adequately cover your home. Its a good idea to shop with an idependent agent who can gear you towards a reputable insurance company. And also, don't limit your choices of companies to only those you see on TV. Some of the best companies are those you have never heard of and pay claims generously. Insurance Professional.

  • chicago3200000 - Monday, November 19, 2007, 11:09PM ET  Report Abuse

    • Overall: 4/5

    The article generally sounds okay. My aunt and uncle had to make a major claim a couple of years ago. Briefly, while they were having some work done on their house (the roof was one of the jobs), their area had a torrential storm. For the sue happy guy a couple of posters down, the roofers followed procedure but it simply was not enough to deal with the rain. Even though, they still had to pay about $6,000, it was far better than the $100,000 that it costs to repair the damage done to the house. To the poster a few down, this country is far too sue happy!! I think the whole blame someone else thing accounts for many of this countries problems.

  • Yahoo! Finance User - Monday, November 19, 2007, 9:12PM ET  Report Abuse

    • Overall: 5/5

    Great article. Remember, most people are pretty stupid as you can tell by their comments. First of all insurance companies use cost calculators to estimate rebuilding the structure. The cost of the land is never included. Second and foremost most clients care only about price, so they get what they deserve. P.S. Insurance companies are for profit so get over it and stop trying to cheat them.

  • David - Monday, November 19, 2007, 7:06PM ET  Report Abuse

    • Overall: 3/5

    I'm not a Suze fan for the most part but this article has some merit. Based on several comments, it's easy to see that a large number of people think home owners insurance isn't very necessary. You people are morons. The amount you "save" by underinsuring is miniscule. The difference of an extra 100k of coverage is typically very low. You should contemplate flood insurance. You should look at personal articles floaters for valuables and you should make sure your liability coverage is adequate (very inexpensive part, but very important). I'm not an insurance agent, but I did sleep at a Holiday Inn last night.

  • D J - Monday, November 19, 2007, 6:20PM ET  Report Abuse

    • Overall: 1/5

    Give it up SUZY! Do you even have or have had an insurance license or written a policy? Do these people know that your degree from the University of Illinois was in Social Work? It's a real pity that it takes Penelope to make you look good. With all the outstanding women in the financial industry, why can't Yahoo come up with anything better than this drivel.

  • Napolean - Monday, November 19, 2007, 5:34PM ET  Report Abuse

    • Overall: 5/5

    Very good article. Good advise. Judging from all the negative posts which are unfounded.Iit looks like a lot of people do not want good advise, still I am inclined to beleive that the large majority of the readers will benefit from this article on insurance coverage. Thank you Suzie!!

  • Yahoo! Finance User - Monday, November 19, 2007, 4:52PM ET  Report Abuse

    • Overall: 5/5

    Not that great an article, but I gave it a 5 to make sure Suze didn't drop below the level of Penelope Trunk. After all, as bad as Suze is, she is a lot better than Trunk. But I have to disagree with her here....you should skimp on insurance because the basic coverage will certainly get you through in most cases and as we all know, most insurance companies are dishonest crooks anyway. They will tell you your house was destroyed by the water, not the wind, and won't pay you a dime, even if you were overinsured like crazy. So the most important thing is to make sure your policy covers the actual threats that your house faces, and don't pay any attention to Suze about getting all that extra bells and whistles (which is very profitable for the companies) that you probably don't even understand. Also keep in mind your own situation. If your current house is too small for you, then you might not want to skimp, but if your house is more than ample, skimping will save you a bundle of money in the long run if you have no disasters, and even if you do...you might have to accept a somewhat smaller replacement, which will be cheaper to heat and maintain anyway. Don't be fooled by the scare tactics.

  • looking4u - Monday, November 19, 2007, 4:41PM ET  Report Abuse

    • Overall: 1/5

    Please, Please people (YOU, hey I am talking to YOU people that congratulate Suzan) do not trust her. Every time she types a word in this yahoo site all she protects and has in her mind are the companies that pay her. The only advice you need if something goes bad with your house is finding a good lawyer (and No I am not a lawyer). Have you ever stopped and to think of why Insurance Companies have the most qualified lawyers in they payroll? Have you ever count of how many of them they have? Even when you have the best coverage they will not pay you what is plainly written in your policy. Suze tells you that is “smart” to pay more than the replacement cost of the house. She does not tell you that the land under your house (25-30% of the house value) will not go away when the unexpected happens. She does not tell you that 93% of the time the foundations are still there and no need to be replace especially the concrete ones, here it is another 15% to 20% of the house value. She does not tell you that even though the values of our belongings 95% of the time are less than 50% of our house value we pay 75% or plus of the house value, and if you have other valuables you must declare them separately. Hmmm nice advice Suze!!!! Do you too get 125% pay-raise to for this advice from whoever pays you to write this garbage?

  • Steve - Monday, November 19, 2007, 4:32PM ET  Report Abuse

    • Overall: 1/5

    Couldn't find a way to rate it lower. Suz is an embarrassment to the financial services industry. I visited with many people who saw her on Oprah. I guess she was desperate for a show. Worst Oprah ever. My recommendation would be get out of financial services and become a woman's rights activist.

  • John - Monday, November 19, 2007, 4:02PM ET  Report Abuse

    • Overall: 2/5

    This would be good advice if the insurance company actually paid out on the claims. In fact, insurance companies routinely deny claims for all kinds of reasons, often on the flimsiest of pretexts. Some insurers would rather fight you in the courts for years than pay on the claims. Run a search for "insurance bad faith" and read the horror stories. It's a shock some of these companies are still in business.

  • Bernard - Monday, November 19, 2007, 2:51PM ET  Report Abuse

    • Overall: 5/5

    YOU NEVER WANT TO SKIMP ON INSURANCE, AS AN AGENT I'VE SEEN IT TIME AND AGAIN, THAT INFACT PEOPLE ARE UNDERINSURED AND THEY CAN NOT REBUILD THERE HOME. IF YOU HAVE A POLICY THAT IS MORE THAN 5 YEARS OLD AND YOU HAVEN'T HAD A COMPREHENSIVE REVIEW WITH YOUR AGENT CHANCES ARE YOU ARE UNDERINSURED. NOT ONLY WITH HOMEOWNER'S INSURANCE BUT ALSO WITH AUTO INSURANCE YOU CAUSE ENOUGH DAMAGE IN AN AT-FAULT ACCIDENT AND YOU DON'T HAVE ENOUGH LIABILITY COVERAGE, GUESS WHAT...THERE GOES ALL YOUR ASSEST WHICH INCLUDES YOUR HOUSE....NEVER SKIMP ON INSURANCE....I RATHER PAY FOR INSURANCE AND NEVER NEED IT, THAN NEED INSURANCE AND DON'T HAVE IT....

  • Yahoo! Finance User - Monday, November 19, 2007, 2:16PM ET  Report Abuse

    • Overall: 2/5

    I'll be lenient here, I'll give you a fair rating instead of poor, (which I almost did do). ...I mean come on; no mention of Flood insurance?? No mention of Earth Movement insurance?? Both these perils are excluded in a standard HO policy, and it probably would have been worth reminding people of that in this article. And what's with "on the other end of the protection pendulum, if you pull out your policy and see that your coverage is for replacement cost or pays only ACV, stop reading right here and upgrade your insurance immediately." No doubt, I agree with you 110% that ACV is a terrible thing, but for crying out loud, a policy providing Replacement Cost valuation is, under most situations, perfectly acceptable coverage. Recommending ERC and Automatic Inflation Guard enhancements to "correct" the "inefficiencies" of RC valuation are OK, I guess, but so long as the insured (and please ...not the agent or the broker) does his/her homework and picks the right replacement cost value & limit for his / her home, and he / she reviews it and makes any necessary changes to it at least once a year, (or upon renovating the home), then I think the insured is in good shape. ...And, last but not least, what's with "if your insurance agent didn't properly value your home when the policy was first drawn up."?? It is the insured's responsibility to make sure the value (limit) is adequate - not the agent's (or the broker's). As you state, the best way to properly assess a home's value is to have it appraised, and this again is the insured's responsibility - not the agent's (or broker's). Guess what... In case you haven't guessed it. I'm an insurance broker and have been for 20 years.

  • Ray - Monday, November 19, 2007, 2:01PM ET  Report Abuse

    • Overall: 3/5

    Suze obviously is in good with the insurance industry. In my opinion, most people are OVERINSURED and pay too much for homeowners. Let's say you paid $400,000 for your house. Chance are, the lot itself is worth at least $100,000 so the value of the structure is only $300,000. After a few years, both the land and the house go up in value, but your insurance company will try to convince you to up your coverage more than the amount by which the replacement cost went up. In other words, eventually you'll be paying for $500,000 of coverage when the fact is the company is not going to pay out more than $375,000 to rebuild your house. The other thing to consider is that most houses are NOT totalled. So if a hurricane rips apart a couple of rooms, or a fire burns part of your house, you will be amply covered even if you didn't go overboard on your total amount of coverage. Finally, even in a worst case scenario, you may well have to put up some money yourself if you skimped on coverage, but so what? You went from living in an old house to living in a brand-new house. You now have a brand-new roof, brand-new applicances, brand-new carpeting, furniture, etc. Your upkeep expenses will be much less for years to come, so if you have to take out a home equity loan to cover the difference, you will still be fine. Don't be bullied by insurance companies and people like Suze into carrying excessive insurance. Just make sure you have enough to replace what you might lose, and no more.

  • brrrrrrrrrrrrr - Monday, November 19, 2007, 1:27PM ET  Report Abuse

    • Overall: 4/5

    Very good article suzie. I enjoy your comments.Tthey help keep me on a financial good path.

  • Yahoo! Finance User - Monday, November 19, 2007, 1:16PM ET  Report Abuse

    • Overall: 2/5

    Sooz or Sue-Zee (I still never know which one it is) does a wonderful job of explaining how percentages work to idiots twice. Apparently I've been lumped into the mouth-breather category for having read her article. Basically you could sum up her article quickly: "Make sure your insurance has the type of coverage that will restore your home at no cost to you instead of just one that pays you compensation for what you lost." She really doesn't get into the helpful information about true risks like "Bryan C" mentioned, let alone flood insurance and the difference that can make. Suze, congratulations, you showed up to work today - now do something worthwhile!

  • JPEG - Monday, November 19, 2007, 1:04PM ET  Report Abuse

    • Overall: 1/5

    In order to offset a risk, you must pay a "premium". This "premium" will be higher than the anticipated quantifiable risk. You are better off assuming risk when your are financially able. Let's see what the insurance companies pay out in SoCal. Guess what,.. they are still fighting about paying for the World Trade Centers. How many years later? The insurance companies don't care... they drag this stuff out, crank up the premiums, and by the time they have to pay, the policy holders have made up the diff. Na na na, boo, boo... I've got more lawyers than you do. Signed: Penolope Trunk, advice godess to all.

  • Marc C - Monday, November 19, 2007, 12:33PM ET  Report Abuse

    • Overall: 2/5

    This advice places total responsibility on the holder of the insurance to know the policy. Fair enough. But the companies need to provide information and clarity in the policy so that these questions are not so difficult to answer; indeed, a water heater leak vs. a burst heater--one is covered, one is not. Insurance is not a board game. It is real life. Suze should devote some time to the companies themselves to comment on which ones actually try to help and make things clear to the consumer, and which ones don't. Did Suze ask any companies for feedback on her advice? I wonder which companies would answer her.

  • Yahoo! Finance User - Monday, November 19, 2007, 12:01PM ET  Report Abuse

    • Overall: 3/5

    Interesting and usefule information. Like all corporations, insurance companies are more interested in profit than anything else, so you must watch your back. "Like a good neighbor...". What nonsense. Suze could have mentioned earthquake coverage. That is necessarily part of your policy, so you might want to check that out if you live in a place where a damaging earthquake is not a remote possibility.

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