Homeowners Insurance – Reviewing Policy Limits
According to a recent survey conducted by Marshall & Swift Boeckh, 59% of all homes in the U.S. are undervalued by 22%. Unlike a home’s resale value (which includes the cost of the land), the cost to rebuild is determined based on the amount needed to hire a contractor plus building materials and other additional costs. In the event that a disaster destroys your home, undervaluation can wreak havoc on your efforts to rebuild.
Before a storm hits, consider taking these actions to remain fully insured and protected:
Review Your Policy Limits
Make sure that your home has sufficient coverage on an annual basis by contacting Cambridge. In addition to reviewing your policy limits once a year, you should also contact us if you’ve remodeled, made an addition or purchased an expensive item for your home, such as a plasma television. We also need to know if you’ve made a major lifestyle change such as marriage, divorce, or taken in an elderly parent who owns expensive heirlooms. With these lifestyle changes may come new things that need to be accounted for in case of a loss.
Understand Your Policy
Read your policy to determine what exactly it covers. Most cover replacement costs, or payment for the cost to repair or replace damaged property using similar materials.
A homeowners’ policy also covers your home’s contents, but coverage will vary based on your policy. You will want to purchase additional insurance to cover jewelry, collections, artwork and memorabilia.
Purchase Additional Protection
A typical homeowners’ policy protects against fire, lightning, wind storm and many additional perils (check your policy for specifics). However, most homeowners’ policies do not protect against damage caused by floods, hurricanes or earthquakes.If you live in an area prone to any specific natural disasters, it is a good idea to look into additional coverage available as a stand-alone policy.
Insure Home Improvements
When making a major change to your home, it is important to talk to Cambridge about insuring those changes. Be sure to let us know the specifics so we can assure you that you have adequate coverage. If you remodeled a bathroom, we want to know whether you installed a standard bathtub or a whirlpool tub or if your countertops are now made of marble – it all adds to the value of your home.
Take Construction Costs into Account
Construction costs are on the rise, so your policy should reflect that. When reviewing your policy, consider the rising cost of materials, labor and supplies, and set your limits accordingly.
Don’t Play the Guessing Game
Homeowners need to protect their investments by reviewing their policy limits and making sure they correspond with the cost to rebuild in case of a natural disaster. Contact us today for assistance on determining the value of your home and to create a policy that will protect your investment in your home.