Is your home policy up to date?
By Scott Culver
In August, hundreds of thousands of people felt the devastation wrought by natural disaster. The cost in human life and property is staggering in the Gulf Coast communities hit by Hurricane Katrina. Right here in Wisconsin, hundreds of residents lost their homes after tornadoes blasted their way across central and southern parts of the state.
Most will depend on insurance to pay for their losses. Unfortunately, many will find they are grossly underinsured - their coverage inadequate to replace what they lost. They may need to settle for a lesser home or supplement the cost with their own savings. The time to consider whether you have adequate protection is now.
Replacement cost: what does it mean?
When evaluating your homeowner's policy, consider how your current provider handles replacement cost.
Replacement cost means that the insured item will either be repaired to the same condition as before the accident or replaced with a new one of like kind and quality. This can apply to both your dwelling and your personal property. However, some companies attach a maximum limit to what they will pay.
For example, if you have a $100,000 policy on your home and it is destroyed by fire, some companies pay to replace the home with materials of the same quality up to 120% of the coverage limit. If the cost to replace your home is really $140,000 and you currently have it insured for $100,000, the insurance company will pay up to $120,000 (120% of the insured value). You may need to settle for a lesser home or supplement the cost yourself.
What to look for in a policy
Look for a company that provides Guaranteed Replacement Cost coverage, which does not have a maximum limit.
Also, be sure your policy automatically adjusts for inflation. If it does not, you will need to contact your agent annually to adjust the coverage limit.
Personal property coverage
Most policies provide a base amount of protection equal to 70% or 75% of the residence coverage limit. If your home were insured for $100,000, your personal property coverage limit would be $70,000 or $75,000.
Consider purchasing additional coverage for high-value items such as jewelry, art, and antiques to ensure you have ample coverage for your other personal property.
Keep your coverage up to date
If you haven't reviewed your homeowner's insurance policy in a while, do it soon. Don't find out the hard way that your coverage isn't adequate.
WEA Trust Member Benefits offers home insurance coverage for WEAC members and their families. We would be happy to help you evaluate your current coverage to make sure you have the protection you need. Just call 1-800-279-4010. WEA Trust delivers value to members
More than 35 years ago, WEAC formed an independent trust to provide a better benefit deal for its members than was available from conventional insurers.
In the ensuing three decades, the WEA Trust has succeeded beyond the expectations of its founders and has set the standard by which public school employee benefits are measured today.
Our programs are designed to protect and enhance the economic well-being of the state's public school employees. And our not-for-profit structure requires that we use all the dollars we receive exclusively for benefit payments and necessary administrative costs. None of the money the Trust collects is spent on sales commissions, stockholder dividends, or exorbitant executive salaries. As a result, public school districts get better benefits at a lower cost.
Financially, the Trust operates independent of WEAC. While the WEAC Board elects the trustees who serve on the various Trust boards, the Trust returns no money to WEAC. All the trustees are active or retired public school employees who serve without compensation. As educators, they understand the needs of public school employees and direct Trust programs to provide quality, comprehensive products and services to members.
Improve your financial security; participate in the programs offered through the Trust, including:
Employment-based insurance: The Trust offers the following group insurance programs when negotiated by a WEAC local:
Health Dental Disability Life Long-term care.
Individual insurance: The following programs are available directly to members:
Auto Home/renters Individual long-term care Additional liability (umbrella). Retirement/investment services:
Tax-sheltered annuity (TSA) IRA. Why the Trust TSA is a good choice
Here are five good reasons why the WEA Trust's tax-sheltered annuity program is right for you:
It's an easy way to accumulate additional savings you will need to supplement your retirement income. A TSA, or 403(b), is like a 401(k) for public employees. You save on taxes while you save for retirement. Your contributions are taken out pre-tax, reducing your taxable income. The Trust plan is a flexible, low-cost program with a wide array of investment options. Both your principal and your earnings grow on a tax-deferred basis. You don't pay any taxes until you take the money out. The Trust is a not-for-profit organization created by WEAC to exclusively serve Wisconsin public school employees.
For information about the Trust's TSA program, visit weatrust.com, e-mail us at
or call us at 1-800-279-4030.
October 10, 2005