Do You Have Enough Home Insurance?

February 13, 2007

(ARA) - Insurance is meant to help you pick up the pieces in case you’re ever faced with a disaster. But sometimes policyholders find out -- after it’s too late -- that they don’t have enough coverage to return to the lifestyle they were used to.

Just because you have homeowners, renters or condominium insurance doesn’t 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 haven’t 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 aren’t 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 home’s value due to inflation. But have you recently remodeled your kitchen, finished your basement or built that deck you’ve always wanted? Any large project like this will likely increase the value of your home far beyond the inflation increase. It’s important that you’re insured accordingly in case you’re 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 $100,000, 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 doesn’t 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, what’s 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 it’s probably not the first thing on homeowners’ minds when they make high-value purchases or undertake remodeling projects, it’s important to keep their policies up-to-date or they run the risk of being underinsured,” says John Hagen, General Casualty’s personal lines business manager. “That’s where insurance agents can provide appropriate counsel and help make sure you’re 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/.com

Courtesy of ARA Content

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