homeowners are underinsured: what can you do?
Did you know millions of homeowners across the United States are underinsured? However, they often don’t know this until it’s too late.
As a homeowner, the consequences of your home being underinsured can be detrimental. Even so, according to Nationwide, about two out of every three homes in America are underinsured; meaning, millions of American homeowners are at risk of significant financial loss should a disaster ever affect their home.
As a homeowner, how can you make sure your property is adequately insured?
Underinsurance is a nationally recognized problem today—and is only getting worse due to rising inflation and increased building costs.
To illustrate, a study showed that over two-thirds of houses in the 2021 Marshall Fire near Boulder, Colorado, were underinsured from between $98,967 and $242,670 and therefore, deemed total losses.
So, what can you do to avoid being underinsured as a homeowner?
how to avoid underinsurance
Luckily, underinsurance can be prevented. Here are a few tips that homeowners can take to avoid underinsurance.
ensure your policy is updated
Have you completed any home renovation or remodel projects recently? If so, be sure to notify your insurance company. Usually, your coverage will need to be adjusted to adequately protect your home.
In fact, according to the Independent Insurance Agents and Brokers of America, one in four projects increases the value of a home by more than 25%. (Yes, we said 25%!)
PS: And don’t limit these updates to only big projects! You should notify your insurance company if you decide to add a deck, pool, trampoline, woodstove, or even a dog to your family! Doing so can help ensure you won’t pay for damages or injuries from these new features.
avoid home insurance coverage minimums
Lenders require homeowners with mortgages to carry a certain minimum amount of homeowners insurance coverage.
This minimum level of coverage typically sits at about $100,000; however, experts recommend three times this amount. Wow!
evaluate your exclusions and endorsements
Exclusions and endorsements illustrate the parts of your policy that either give or take away coverage.
keep track of your personal property
Homeowners’ policies typically cover a percentage of one’s personal property.
Take inventory of your personal property periodically. If the value of your personal items exceeds your coverage limit, we’d recommend purchasing additional coverage (called an endorsement or rider).
Today, it is so simple to use your cell phone to take an interior home video. Don’t be shy. Open the drawers, cupboards, and closets. Get it all on video.
get in touch with our team at benchmark commercial insurance
These steps are just the tip of the iceberg in terms of ensuring your home is properly insured. It can be difficult and even overwhelming to do this all yourself, which is why our team at benchmark commercial insurance is here to help.
Reach out to our team today to see if your home is underinsured. Then, for business owners, continue reading to find out how to insure your business.