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While the vast majority of homeowners have a homeowner’s insurance policy, how do you know it is enough?
Knowing whether you have enough insurance, or if you are underinsured, is never a bad idea. But how do you know? And what does it mean to be underinsured? When you are underinsured, it just means your homeowner’s insurance policy isn’t big enough to cover a total loss.
This is usually because of exclusions, policy limits or a difference in rebuilding costs. And it means you’ll have to pay out of pocket if the worst happens.
Homeowner’s insurance is usually the only thing that allows a homeowner the financial ability to rebuild after a devastating loss like a flood or fire, so it’s important to understand your policy.
Here are three things you need to know about your homeowner’s insurance policy.
What kind of catastrophe is covered?
Most people assume that a catastrophe (fire, flood, tornado) is going to be totally covered if they lose their home. But that isn’t always the case. Weather damage happens, and it is happening more and more. It’s never a bad idea to check in with your insurance agent to see if you need to increase or add coverage.
Rebuilding or repairing your home after a devastating loss is not going to be cheap, and the price of construction materials is on the rise. The pandemic has made some materials harder to get – so they are more expensive. So, if your home is worth $200,000 now, it might take $300,000 to rebuild it.
If you think there is a gap in your policy, make sure to chat with your insurance agent.
Personal property valuation
Most people don’t think about just how much it will take to replace the loss of your personal property, if your house is destroyed. If you have $30,000 insurance for your personal property, imagine replacing everything in your home for that: Clothing, furniture, toys, kitchen supplies.
It adds up – and fast.
If you aren’t sure if you have enough insurance in your homeowner’s insurance policy, it’s a good idea to find out now – before something happens.
Crumrine Financial Services
At Crumrine Financial Services, we can help you find the policy you need. Call us for a quote.