Most of us don’t give much thought to our homeowner’s insurance coverage after we purchase our homes and assume all policies are the same. It’s easy to see why: For those of us with a mortgage, the cost of homeowner’s 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 for us.
But taking some time periodically to review your homeowner’s insurance coverage is a good idea to make sure you have the proper coverage. Also, things change over time and you need to make sure that your homeowners is current. Doing so can help you avoid any number of insurance blunders that can leave you under-insured or uninsured for different types of disasters. Here are the areas you’ll want to check:
Did you purchase any valuable items recently? Jewelry, furs, and fine arts are among the many items that have limited coverage under your homeowners insurance policy. In order to get the full value to replace these items, they will need to be individually scheduled or covered on a blanket basis. A normal homeowners policy limits the coverage for jewelry at $1,500 if stolen. Take some time to get valuable items appraised to ensure the full replacement.
Do you have enough liability coverage? Many people don’t realize that the liability portion of your homeowner’s insurance coverage covers you both at home and while you’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 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 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.
Do you have flood, sinkhole or earthquake coverage? These three risks are not covered by standard homeowner’s 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. And there are a lot of areas in Pennsylvania that are susceptible to sinkholes because of the soil type.
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 homeowner’s insurance coverage so that you can afford to rebuild your home and replace your belongings. Since construction costs can increase over time, this is one area that’s especially important to review.
Are you bundled? Bundling your insurance policies – buying coverage such as homeowner’s and auto insurance from the same company – can save you a substantial amount of money.