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7 Questions to Consider When Renewing Your Home Insurance...
If you own a house, homeowner’s insurance is a necessity. Not only do you need it to protect your home and possessions against damage and theft, your mortgage lender will also require that you carry it if you have a loan on your home. It’s not enough to simply have coverage, you need to have the right coverage. We ALWAYS suggest that it is a good time to review your policy is when it comes up for renewal annually. Of course, we do it for you here at Benton White Insurance.
Insurance companies have the right to change your contract upon renewal. If you aren’t really paying attention to it, you could end up with some surprises. We do all that we can to make sure you know of those changes if they occur, but you taking the time to review is added security that you know what is going on with your insurance policy.
1. Am I underinsured?
Statistically, there are estimates that two out of every three homes in America are underinsured. When purchasing coverage, a lot of people consider only the market value of their home and not the replacement cost. What if your home was picked up and moved to a less desirable area? While the cost of building the house would be similar, the market value would be wildly different because of the neighborhood. If your home is insured based on its market value, that leaves you at risk of having incomplete coverage. In the case of a total rebuild, most people end up paying a lot of money.
2. Is my deductible too low?
Your deductible is the amount you pay before your insurance kicks in. Many insurance companies are starting to provide premium reductions for consumers with higher policy deductibles. We are available to give you comparisons of what kind of premium credit you would get if you moved to a higher deductible. One rule of thumb that many people use is to accept a higher deductible when the increase in deductible divided by the premium savings is five years or less.
3. Has my deductible changed?
A growing number of insurance companies are changing policy deductibles from a flat deductible to a percentage deductible. Let’s say you have a $500,000 home and a $1,000 deductible. Your insurance company changes your deductible to 1%. This means you now have to fork over $5,000 when filing a claim! None of my companies have gone to this and that makes our rates extremely competitive against those that offer percentage deductibles. Please note that any changes to deductibles would occur upon renewal – not during the policy year. Some of our companies are offering higher deductibles for certain types of losses, such as wind or hail which can save you the additional premium.
4. Do I have enough sump pump/sewer coverage?
Don’t assume that you have sump pump failure coverage. Water damage from a sump pump failing or water that backs up from a sewer drain can be very costly. Most insurance companies will exclude this damage as a cause of loss. However, we always quote this extra coverage with our rates because we have experienced very messy claims in the past from water backup of sewers. Not pleasant and very costly to say the least!
5. Does my policy cover claims for personal injury?
With the advent of social media, personal injury claims are becoming prevalent. Personal injury refers to things such as libel, defamation or invasion of privacy. What does this have to do with homeowner’s insurance you might ask? While you might be careful about what you do or say online, your child may not. Adding this coverage to your home insurance often costs less than $50 a year.
6. Are my valuables covered?
Most policies limit the amount of coverage for lost or stolen jewelry to $2,500 or $5,000 after your deductible is applied. If you have jewelry worth more than either of those amounts, you can do what’s called “scheduling the jewelry.” Scheduling personal property simply means adding coverage for high-value items. Depending on the company, that could cost you $12 to $15 per thousand dollars annually. In some cases, even less than that!
7. Is my homeowner’s liability limit too low?
Every homeowners’ policy has two types of coverage: liability and property. Property coverage includes your house and furniture. Liability coverage protects you if someone is injured and it is your fault. Getting the maximum amount of liability insurance makes a lot of sense. We quote STANDARD, $500,000 liability on our policies simply because we want our insureds to have sizable coverage for that risk. We also suggest a Personal Liability umbrella in addition to that amount that can pay $1,000,000 in excess liability for home or auto exposures.
Many of our insureds know and rest in the fact that we REVIEW OUR RENEWALS. If any company we have increases their rates or changes coverage outside of marketable norms, we shop other companies to see if there is a better fit! We want our insureds with the best company with the most coverage for the most competitive premiums. We’re all encouraged to go to the doctor every year to get a checkup! It’s no different with your homeowner’s insurance. Let us know how we can help!
Feel free to EMAIL us at info@BentonWhite.com or TEXT or CALL – 615.377.1212 if we can help you with your insurance. We’re here to simplify insurance and help you find ways to cover risks that could be in your future. We’re ALWAYS READY to earn your business!
[Portions of this blog came from a Personal Finance story written by Linda Bell with FoxBusiness.]