Is it time to review your homeowners insurance?
Most of us don’t give much thought to our homeowners insurance coverage. It’s easy to see why: For those of us with a mortgage, the cost of homeowners insurance is rolled into our monthly mortgage payment. And we don’t even have to write out a check for our premiums. Our mortgage company handles it all for us.
But taking some time periodically to review your homeowners insurance coverage is a great idea. Doing so can help you avoid being underinsured or uninsured for different types of disasters. Here are the areas you’ll want to check:
Do you have enough liability coverage? Many property owners don’t realize that the liability portion of their homeowners insurance policy covers them both at home and while they’re away. It also covers both you and any family members who live with you. This coverage is crucial because It protects against many types of accidents and events that can otherwise leave you and your family with a heavy financial burden. Did your child throw a baseball that hit your neighbor’s home – or your neighbor? Did your dog bite the postal carrier and send him or her to the ER? Did your neighbor slip on your front steps and break a leg? Oftentimes, it costs much less than you may think to increase the amount of your liability coverage or to purchase additional liability insurance via an umbrella policy.
Do you have flood or earthquake coverage? These two risks are not covered by standard homeowners insurance policies, yet only a fraction of homeowners are covered. Many homeowners simply don’t realize they are at risk. The problem with floods is that one-quarter of all flood losses are in areas deemed “low risk.” Wildfires and other factors can make an area that has never been prone to floods suddenly susceptible to flooding and mudslides. Check out your property’s risk of flooding and earthquakes and talk to us about the cost of covering for either or both of those events.
Are you covered for rebuilding? It’s never a good idea to insure a home for its market value, the home’s purchase price or what you owe on your mortgage. You’ll want to make sure you have enough homeowners insurance coverage so that you can afford to rebuild your home and replace your belongings in the event of a catastrophic loss. Since construction costs can increase over time, this is one area that’s especially important to review periodically.
Are you bundled? Bundling your insurance policies – buying coverage such as homeowners and auto insurance from the same company – can save you a substantial amount of money.