One of the biggest concerns we have as insurance agents is ensuring your home has the right type of coverage and limits to ensure you are properly protected. Being properly insured and knowing the value of the home and possessions can provide some peace of mind during what could be an extremely stressful period.
We recommend reviewing your insurance policy annually to make sure you current coverage is sufficient. As you do so you want to make sure you will be in the same position prior to suffering the loss. For example if you have to rebuild your home, you will want to make sure you have full replacement cost coverage for your home.
As you review your policy, here are the main areas to focus:
1. Rebuilding Your Home
Make sure you enough coverage to rebuild your home if it was completely destroyed. This should include items like building material, appliances, fixtures and even the ability to tear our existing debris. Depending on your location and the housing market, sometimes the rebuilding costs can be more than your home’s market value.
2. Replacing Your Possessions
Most contents coverage is included on your insurance policy as a percentage of the structure’s value. It’s important to check that you have replacement cost coverage as opposed to actual cash value coverage. Replacement cost coverage will reimburse you to replace the damaged property with like kind and quality where as actual cash value will only pay the value of the destroyed property after deducting depreciation costs.
When you do have to make a claim, some companies will require you to itemize everything you had before they pay anything. Since remembering what you own can be difficult during what’s already a stressful time, experts suggest routinely doing an inventory of your home.
Taking pictures or videos of your home and contents is an easier way to remember than itemizing everything on a piece of paper. There are also free online tools available to assist with this as well.
Most companies start out with $100,000 of liability coverage in a plan. Homeowner’s generally have more risk than they realize, especially if they have a pool, trampoline, young drivers or pets that could bite someone, for example.
It’s also important to consider an umbrella policy as well that will typically provide up to an additional $1,000,000 in coverage above your homeowners policy.
To find out if your insurance policy is providing the right coverage, please reach out to our office to find out more.