(ARA) – Insurance is meant to help you pick up the pieces in case youre ever faced with a disaster. But sometimes policyholders find out — after its too late — that they dont have enough coverage to return to the lifestyle they were used to.
Just because you have homeowners, renters or condominium insurance doesnt necessarily mean you have enough coverage. In fact, some industry estimates say that as many as three out of four U.S. homes are underinsured.
If you havent re-evaluated your insurance coverage lately, it may be time to set up a meeting with your agent to review your policy. Since you first bought your insurance, your needs may have changed, your home may have increased in value, or you may have accumulated items that arent covered by your policy.
Increased home value
When your insurance bill arrives, you may notice that each year it calculates a slight increase in your homes value due to inflation. But have you recently remodeled your kitchen, finished your basement or built that deck youve always wanted? Any large project like this will likely increase the value of your home far beyond the inflation increase. Its important that youre insured accordingly in case youre ever faced with a loss.
Should you experience a disaster, such as a fire or tornado, many insurance policies have a fixed upper-limit on how much they will cover. For example, on a General Casualty homeowners policy with a building replacement cost endorsement, the insurance company will pay up to 25 percent more than the value the home is insured for. So for a home insured at $100,0, General Casualty would pay up to $125,000 to replace it. If the home is underinsured by more than 25 percent, the policyholder may be responsible for the extra amount.
For higher value properties, owners may want to consider a policy that features guaranteed replacement coverage, which doesnt limit the coverage amount to rebuild the home. Many companies offer this additional protection in their upscale home packages.
Your stuff may require more coverage
While your home itself may or may not have grown or changed over the years, whats inside probably has. Most of us find that we accumulate more possessions over the years. And certain high-value items may require coverage endorsements that go beyond coverage limits included with your policy. Some common items that may require extra coverage include jewelry, electronics, silverware, firearms, furs and specialty collections, such as stamps or coins.
While its probably not the first thing on homeowners minds when they make high-value purchases or undertake remodeling projects, its important to keep their policies up-to-date or they run the risk of being underinsured, says John Hagen, General Casualtys personal lines business manager. Thats where insurance agents can provide appropriate counsel and help make sure youre protected.
General Casualty Insurance Companies, based in Wisconsin since 1925, provides home, auto and business insurance through independent agents in 12 Midwestern states as well as Connecticut, Maryland, Massachusetts, New York and Pennsylvania. Consumers can locate a General Casualty agent near them by logging onto generalcasualty.com/agencyloc/.
Courtesy of ARA Content
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