Your home is one of your greatest assets and a significant long-term investment. As such, it’s vital to protect your home and its contents with adequate homeowners insurance. Nevertheless, recent research found that many homeowners lack proper coverage. In fact, nearly 2 out of every 3 homes in America are underinsured—which means that the home is protected to an extent by a homeowners policy, but that policy doesn’t have sufficient limits or coverage features to cover the full expense of a potential claim. What’s worse, the average underinsurance amount is over 20%, with some homes being underinsured by as much as 60%.
Don’t let your home become another statistic and suffer the devastating consequences of inadequate coverage in the event of a loss. Review the following guidance to ensure your homeowners insurance policy meets your unique needs and can offer the best possible protection when disaster strikes.
Homeowners insurance offers financial protection in the event of an unexpected disaster or accident involving you, your home or your personal property. However, homeowners insurance policies consist of several different types of coverage. With this in mind, it’s important that you review each form of coverage included on your policy to make sure you are adequately insured for your specific risks. Here are some key coverage elements to look out for:
Dwelling coverage is the portion of your homeowners insurance policy that can offer compensation for the cost of repairing or rebuilding the physical structure of your home if it gets damaged or destroyed by a covered event (e.g., a fire, a windstorm or vandalism). To secure proper dwelling coverage:
Other structures coverage is the portion of your homeowners insurance policy that can help cover the cost of repairing or rebuilding any detached structures on your property (e.g., a shed or fence) if they get damaged or destroyed by a covered event. Similar to dwelling coverage, it’s crucial to ensure that you have enough other structures coverage to compensate the full cost of rebuilding any of your detached structures. In addition, be sure to reevaluate your coverage needs whenever you make changes to any of your detached structures or add a new detached structure to your property.
Personal property coverage is the portion of your homeowners insurance policy that can provide reimbursement for the cost of stolen or damaged items inside your home, such as furniture or electronics. To ensure adequate personal property coverage:
Loss of use coverage is the portion of your homeowners insurance policy that can help pay for temporary living expenses in the event that you have to move out of your home while it’s being rebuilt or repaired due to a covered event. Loss of use coverage typically equates to up to 20% of the insured value of your home. That being said, make sure you consult your broker if you are concerned that such a value won’t offer enough financial protection for your temporary living arrangements. Also, remember that if you conduct business within your home, this form of coverage will not protect against any loss of income related to your business. You will need to secure specialized coverage for business-related risks.
Liability coverage is the portion of your homeowners insurance policy that can offer compensation for the expenses that may result if you are found liable for injuring another person or damaging their property. These expenses include medical payments, pain and suffering settlements, lost wages, legal costs and death benefits. Because these expenses can be significant, it’s vital that you have adequate liability coverage tailored to your specific risks. Otherwise, a liability claim could wreak serious havoc on your assets and financial well-being. Various property features (e.g., having pets, a trampoline or a pool) can increase your liability risks and require further protection. We highly suggest you purchase personal umbrella insurance, which can provide additional compensation if your liability coverage is exhausted following a covered claim.
Lastly, keep in mind that some events—including overland floods and earthquakes—are not always considered covered events on your homeowners insurance policy. If you live in an area that has an elevated risk of these weather-related catastrophes, you will need to obtain additional, specialized coverage. Also, don’t forget that you will usually (with the exception of liability coverage claims) have to pay a deductible before your homeowners insurance kicks in. What’s more, each form of coverage is subject to a limit, which is the maximum amount your policy will pay for a covered claim. Be sure to review your coverage limits to ensure maximum protection.
We’re Here to Help
There are a variety of factors to consider to make sure your home is properly insured. Neckerman Insurance Services is here to walk you through your homeowners policy and help you secure ultimate insurance protection for your personalized risks—ensuring full coverage in the event of a claim. For further insurance guidance, contact us today.
© 2020 Zywave, Inc.