Homeowner’s insurance is a “necessary evil” that comes with owning a home, especially if you have a mortgage.
You pay it every year, either as part of your mortgage or when the bill comes in the mail. But, God forbid, if you were to have a loss, would your policy be enough to cover what happened?
That’s where a home insurance check-up comes to the rescue. If you’re uncertain whether or not you’d be fully covered the next time a storm blows through it might be time to check your policy.
Here’s how to be sure that you’re not vulnerable to gaps in coverage or have inadequate protection.
Step 1: How much insurance do you need?
To get started, take a look at your current policy and assess your coverage needs. Do you know what your coverage limits are? Are there any gaps in your coverage? Think about any recent renovations or changes to your property that may affect your coverage needs.
Step 2: Are you missing one of the different types of coverage?
Your home insurance policy likely includes several types of coverage, such as dwelling coverage, personal property coverage, liability coverage, and additional living expenses coverage.
Take a closer look at each of these types of coverage and make sure you have enough protection in each area.
| Dwelling coverage | This type of coverage is designed to protect your home’s structure |
|---|---|
| Personal property coverage | Covers your personal belongings, such as furniture, appliances, and clothing |
| Liability coverage | Protects you against lawsuits arising from injuries or damage that occur on your property |
| Additional living expenses coverage | Provides financial assistance for temporary living expenses if you’re unable to stay in your home due to a covered loss |
Step 3: Do you understand the exclusions on your policy?
It’s also important to understand policy exclusions, or situations that your insurance policy doesn’t cover.
For example, most home insurance policies don’t cover flood damage, so if you live in a flood-prone area, you may need to purchase separate flood insurance coverage. Make sure you understand your policy’s exclusions and consider purchasing additional coverage if necessary.
Step 4: Review deductibles
Your policy deductible is the amount you’ll pay out of pocket before your insurance coverage kicks in. Take a look at your policy’s deductible and consider whether it’s the right amount for your needs.
Note that a higher deductible will typically mean you’re paying a lower premium, but it also means that should you need to file a claim you’ll pay more out of pocket before the insurance kicks in.
Step 5: Compare policies
Shopping around for insurance policies can be a “pain in the you know what”, but it’s worth it to find the best coverage at the best price. Compare coverage, limits, and premiums from different insurance providers to make sure you’re getting the most value for your money.
Step 6: Work with your insurance agent
Your insurance agent is your ally in navigating the world of home insurance.
Don’t be afraid to ask questions, review your coverage needs, and update your policy as needed. Your agent can help you understand your policy and make sure that you’re fully protected.
In conclusion, a home insurance checkup is an important part of being a responsible homeowner, and it doesn’t have to be overwhelming or stressful. Take a deep breath, pour yourself a cup of coffee (or whatever your beverage of choice might be…no judgment here!), and schedule some time to review your policy. You got this!
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