The Importance Of Having A Homeowner's Insurance

A question for all homeowners 📣

When you bought your home, your lender required you to get homeowner's insurance, so you hurriedly made a decision without truly comparing different policies or providers. You may have even decided to just bundle policies with the insurance company you got your car insurance through 10 years ago... does this sound familiar?

Believe it or not, 3 out of 5 people are underinsured by at least 20% on their homeowner's insurance policy — which could end up costing hundreds of thousands of dollars if the unthinkable happens. Your home is most likely the largest asset you'll ever own, so it is crucial to ensure that it is protected in the event of an emergency.

If you haven't reviewed your homeowner's policy in a few years, or just want to make sure you're adequately covered, this post is for you! Read along for a few tips on choosing the right coverage to ensure you're properly protected. 

Do you have enough insurance to rebuild your home?

Your policy should cover the cost of rebuilding your home at current construction costs. In other words, you should have enough insurance to fully rebuild your home today in the event that it is completely destroyed.

PRO TIP: Did you finish your basement or redo your kitchen? Make sure you let your insurance company know when you make upgrades so that you are adequately insured.

Do you have enough insurance to replace all of your possessions?

To determine whether you have enough coverage, create a home inventory list — this should be a detailed list of everything you own and the cost to replace these items. Not only will this help you determine how much coverage you need, but it will also make the claims process much smoother in the event of an emergency.

PRO TIP: Download the app Encircle. It helps you to easily create a home inventory list using your phone!

Do you have enough insurance to protect your assets?

Homeowners insurance also provides liability protection, which protects your financial assets in the event that you or another member of your household are legally responsible for damage to another person or their property.

For example, if a guest falls down your stairs or is otherwise injured on your property, your son throws a football through the neighbor’s window, one of your child’s friends gets Injured on your trampoline, etc. Be sure to select a liability limit that properly covers what you have in assets.

A FEW more quick TIPS:

Be aware of exclusions.

Depending on where you live, there will be a list of things that a standard policy won't cover. This includes earthquakes, landslides, and flooding. Other additional coverage and endorsements include water line, sewer line coverage, equipment breakdown, and home business. DID YOU KNOW? If the sewer line breaks between your home and where It connects to the street, you are on the hook to replace it. That can cost upwards of $10-15,000.

Understand your deductibles!

It's important to pay attention to your deductibles for property damage. Your deductible is the portion of the claim you're responsible for, so make sure the deductible amount is within your budget. For example, you may not want to elect the policy with a lower monthly premium that requires a $5,000 deductible because anything under $5,000 will come out of your pocket.

REMINDER: Review your homeowners & Auto insurance policies every year

PRO TIP: find an insurance rep you trust! If the worst-case scenario happens, you’ll be happy you did.

Most people are not fully aware of what they are covered for until they need it. Don't let that happen to you! Peace of mind starts with the right coverage.

Let me know if you need a great insurance agent — I have amazing connections, and it would be worth a checkup.

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