One of the most common mistakes people make with their homeowner’s insurance is to sign the policy without fully understanding what it does and does not cover. Having adequate insurance in place in the event of an emergency goes a long way in creating peace of mind. That being said, make sure you know what to review on your homeowner’s insurance policy to ensure your plan is the best one for your circumstances.
What Should You Review on Your Homeowner’s Insurance Policy?
Of course, every insurance policy is different, and each one is tailored toward an individual’s assets, needs, budget, etc. However, no matter your living situation, relationship status, or financial situation, always review these 4 things on your homeowner’s insurance policy.
1. Minimum Liability Coverage
Generally speaking, your liability insurance should cover the amount of all of your assets combined. In other words, add up the cost of your home, vehicles, belongings, family heirlooms, and even the money in your bank account. In the event of a natural disaster or another emergency, you could lose everything, so you need a full-coverage minimum.
2. Rebuilding/Replacement Coverage
Additionally, keep in mind that rebuilding costs 10 years from now might not be the same as what they are today. If the cost goes up, your insurance company might have something to say about it. Keep an eye on potential replacement costs to see if they exceed the value of your home.
3. Personal Property Coverage
Personal property is often where homeowner’s insurance gets a little hairy. If you don’t possess proof of the value inside your home as well as outside, you might have trouble getting the losses covered. In addition to requesting a professional appraisal, periodically take pictures of your home’s interior. Don’t forget to photograph inside drawers, cabinets, etc. to ensure you have pictures of every belonging. Also, check your homeowner’s insurance to see exactly what type of property is covered. Most policies even cover the loss of food.
For sentimental items that cannot be replaced monetarily, make sure you invest in a waterproof, fireproof safe.
4. Additional Living Expenses (where you will stay, what you will eat, etc.)
Another thing few homeowners consider is the cost of living while waiting for their home to be rebuilt. Where will you live? What will you eat? What parts and to what extent will your insurance company cover this living situation?
Additional Things to Keep in Mind
In addition to reviewing the above items, make sure you keep a few important thoughts in mind.
1. Your house comes first.
If you can’t get full coverage for personal possessions and additional living expenses, remember that the home comes first. Whatever else happens, it is important that you have reliable homeowner’s insurance in the event that your house is destroyed.
2. Certain situations require separate deductibles.
Additionally, keep in mind that not everything is covered by one policy. For example, in some states where hurricanes occur regularly, a separate deductible is required for hurricane damage.
3. Keep an eye on your rates.
Periodically check your rates to make sure the percentage hasn’t changed. An insurance provider is a service, and if things get a little too tight or unfair, you can always enlist the help of someone else.
4. Always know what’s going on behind the scenes with your homeowner’s insurance.
Most importantly, just remain aware of what your homeowner’s insurance policy means for you. Every situation is easier to face with a plan, and good insurance offers just that.
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At Sheffield Homes, we have more than 40 years of experience to help guide you through the home building process, every step of the way. Call us today at 303-420-0056 to begin planning your custom home in the Denver metro area or in northern Colorado.