Your Guide To Property Insurance

Signs That Your Home May Be Underinsured

Many people are living in under insured homes, which mean they won't be fully compensated if disaster strikes. To make it worse, many of those living in under insured homes don't even know that they don't have adequate insurance protection. Here are some of the situations that may mean your house is under insured:

You Have Renovated the House

Renovating the house can increase its replacement cost, which calls for greater insurance coverage. For example, the house is damaged by a fire after you have upgraded the kitchen, added a bathroom or finished the basement, the insurance company will pay more to repair the house than it would have spent sans the upgrades. Therefore, after you have upgraded the house, it's best to have it appraised again to determine whether you should increase your insurance coverage too.

You Have Bought More Items

Home insurance covers both the structure and its contents. Therefore, if you have bought more home contents since you bought the current policy, you are probably under insuring the house. This may be the case, for example, if you have bought a bigger TV, imported an exotic rag, and installed a state-of-the-art home theater; you need more coverage to cover those things.

You Have Experienced a Significant Life Change

There are some life changes that automatically call for an increase in home insurance coverage. For example, when you buy a pet, you expose yourself to pet bite lawsuits, which mean your home insurance liability portion should be upgraded. Another example is when you get married or get a child; both babies and spouses typically lead to an increase in possessions, which call for increased coverage.

You Have Had the Same Policy for Years

The longer you have been on the same policy, the greater the chances that you have experienced the previously mentioned factors. For example, most people's possessions increase over the years. Apart from that, home construction costs are constantly on the increase, and this means it would take more money to repair or replace your house now than it would have cost when you first insured the house. All of these mean that you should reevaluate your insurance coverage periodically.  

You Don't Have Supplemental Insurance

You should also know that standard home insurance doesn't cover all damages your home might face. For example, damage to your home business equipment may not be fully covered, damage caused by flood is not covered, and damaged caused by an earthquake isn't covered too. Therefore, if you only have the standard coverage, it probably means you are not fully covered.


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