A shocking majority of homes in the United States are underinsured. Even though a home may be the largest investment many people make in their lifetime, they often skimp on homeowner’s insurance as a way to cut costs. Or, many homeowners just don’t have a full understanding of what their policy covers or when to work with their insurance provider on adjustments. Make sure your policy covers all that your home is truly worth, even in the worst of times. We at ServiceMaster Superior Cleaning and Restoration Services have seen the damage a disaster can do to a home, providing restoration services for damages caused by water, wind, mold, fire and smoke. You may not always be able to prevent these disasters from happening to your property, but you should feel confident that your home is properly insured to pay for repairs.
We’ve put together a few tips for checking if you have the right level of insurance:
Know Your Policy
Reading through a home insurance policy might bore you to tears but knowing exactly what you’re paying for—or, what you think you’re paying for but are actually not covered for—will provide you a better idea of your risk for out-of-pocket expenses. For instance, homeowner’s and renter’s insurance does not typically cover flood damage, which is the most common and costly natural disaster to happen to a property. You’ll have to buy a separate policy to cover it.
Reconstruction Cost is Different than Market Value
Reconstruction Cost is the estimated cost to entirely rebuild your home from the foundation up with similar materials and/or quality. This becomes especially important when it comes to older homes that may require unusual or scarce materials expensive to find or duplicate.
Market Value is what a willing buyer would pay to purchase your home, taking into consideration the lot and location. Do not assume that coverage matching your mortgage balance is enough to completely rebuild your home. The amount of insurance you buy should reflect reconstruction costs, not how much your home is worth on the current market.
Have You Remodeled or Made Improvements to Your Home?
If you’ve added a new deck or remodeled your master bath, you’ve just increased the value of your property. This means you also need to adjust your insurance to reflect that new value. Let your agent know if you’ve added or remodeled parts of your home before or shortly after renovation begins, rather than waiting until the job is complete. It’s a good idea to review your home insurance every other year with your agent to make sure that any changing circumstances of the property are included in the policy.
Include Your Personal Possessions
Document all important personal possessions. It’s unlikely that you’ll remember everything stored in your garage after a disaster damages a greater portion of it. Create a digital document of your most important personal items so you can have this information ready for your agent. In addition, many policies only cover the current value of your possessions, not what you originally paid for them. Consider buying an optional replacement cost coverage plan for personal belongings, so that your damaged items can be replaced with new ones.
If you’re ever unsure about what is involved in your policy, call your insurance agent to talk over these points. As a homeowner, it’s important to feel safe in knowing that you have sufficient coverage for the value of your home and possessions. And if you ever find yourself with a property disaster, call the pros at ServiceMaster Superior Cleaning and Restoration. We’ll restore your property to pre-loss condition, work with your insurance company and most importantly, restore your peace of mind.