If you are a homeowner and currently pay a homeowners loan, then you likely already know that you must have insurance. However, you might not have enough insurance to cover your losses, especially if you’ve owned your home for many years. Home values and risks change over time, and chances are that you are likely underinsured.
You should look over your homeowners insurance documents on a regular basis to make sure you have adequate coverage. Here is more information about what you should check over with your homeowners insurance policy.
Did Your Home’s Value Increase?
Most homeowners in Washington State have enjoyed a moderate increase in value over the years. Not only does this mean that you have earned on your investment, it also means that you will likely need more money if you need to replace your home or buy a new one if you have a total loss.
Did You Make Improvements to Your Home?
Good quality improvements add value to your home but are also more costly to replace should they receive damage. In addition, material costs also increase, so if that added room or your carefully customized bathroom or kitchen have damage, then you will need more money simply to replicate what you had before.
Did You Acquire New Expensive Items?
If you have standard HO-3, or the more comprehensive HO-5 insurance, then you also have protection for your personal property during a covered event. If you’ve acquired more high-end items, then you should examine your policy’s limits to see if you have enough coverage to replace these items if needed.
Do You Need Optional Insurance?
Your homeowners insurance does not automatically cover for flooding or earthquakes (yes, Washington has earthquakes). In these cases, purchase extra insurance if you want coverage for these events. Likewise, you will not be covered for structures and property in your yard or if your plumbing backs up without special coverage.
Do You Have Enough Liability Coverage?
All homeowners should have basic liability coverage in case someone gets hurt on your property. You may want to examine your liability limits because medical costs are often very high, and you may not have enough to cover a serious injury. You should have enough to cover your entire home to completely protect it from loss.
Do You Need an Umbrella Policy?
In addition to your regular liability coverage, you should consider an umbrella liability policy to cover you for unexpected excess losses. Generally, these policies require that your homeowners insurance already has a certain level of liability coverage in the first place.
Do You Need to Adjust Your Deductible?
Examine your deductible on a regular basis. Your policy’s deductible is the amount that you automatically pay out of your pocket should a covered event occur. Deductibles are either a fixed dollar amount or a percentage of the covered loss. Generally, the minimum deductible is based on how much you can afford as well as your lender’s and the state’s minimum requirements.
You could save money, in the long run, by raising your deductible. However, you should consider whether you can truly afford to pay this deductible should you need to use your insurance. If your deductible is based on a percentage, then your costs may be very high.
You may be reluctant to buy more than the minimum amount of insurance because you feel that you will never use it. However, in the rare circumstance that you either lose your home or are involved in a lawsuit that puts your home at risk, you will appreciate having the appropriate amount of insurance.
We at Callis Insurance are independent insurance agents and can look over your policy and help you determine if you are overinsured or underinsured. Contact us for an appointment so that we can get started on getting you the best coverage for your needs.