One of the largest mistakes a homeowner can make when buying homeowners insurance is simply not buying enough to cover a catastrophic incident. In fact, according to Consumer Reports, three-out-of-every-five Americans are underinsured, some by as much as 20%.
Take a scenario where a wildfire engulfs a home and a homeowner is shocked to discover that their insurance doesn’t cover enough for the rebuilding. This could mean huge unanticipated expenses or potentially a loss of a home. How can you avoid a situation like this? One way it do do your research on insurance and ask the right questions when deciding on your policy.
Where To Start?
When you first bought your home you were probably inundated with paperwork and financial details like the mortgage, PMI, and interest rates. Once you have a chance to settle in, you will want to take some time to talk to your agent to make sure you are completely covered. Questions may help you determine if you need to add coverage to your policy.
The main areas that you will want to discuss are:
- Is there enough coverage to rebuild the dwelling in the case of a catastrophic event?
- Is there enough coverage to replace your personal property within the dwelling?
- What is the liability coverage on your home? What are its limitations?
- In the case that your home is uninhabitable for a time, are there reimbursement costs for living expenses?
If you are unaware of the common terminology of homeowners insurance, your agent will hopefully help you understand the basics so that you can understand the components of your own policy.
Our agents have had years of experience working with new homeowners and veterans alike. We try to the best of our ability to answer your questions and clearly and precisely as possible. If we don’t know the answers, we make it our goal to find them for our clients.
In case you need a refresher on the common terminology here are some of the terms you will hear in regards to homeowners insurance:
Liability Insurance –
This term refers to the coverage of injuries to people who are on your property or caused by members of your family (or pets.) For instance, if your dog injures a guest on your property, they may be entitled to both medical and legal compensation. Talk to your agent about how much is typically part of a homeowners insurance.
Hazard Insurance –
This type of insurance covers physical damage or loss due to a disaster. Common coverage includes: fire and smoke, wind, hail, lightning, explosions, volcanoes, riots and vandalism, theft, water damage, and similar events. A good question to ask your agent would be about what is excluded from the list of covered events since hazard insurance doesn’t cover everything.
Do you need a review of your homeowners insurance policy? Our agents can help you determine if you have enough coverage and what exclusions there are to your current policy. Call us at 978-774-4338, or contact us through our website with questions.