FINANCIAL FRIDAY: Re-evaluate Your Home’s Insurance Coverage
With the recent outbreak of severe weather, now is a great time to re-evaluate your home’s insurance coverage.
HUNTSVILLE, Ala. (WAFF) - Three out of five American homes are underinsured by an average of 20 percent according to CoreLogic, a firm that calculates home values. Many homeowners don’t check to be sure their home is valued properly or that their insurance coverage is keeping pace with inflation. So now, is a great time to check your homeowner’s insurance plan and know what is covered.
What do you need to know? WAFF talked to Tyler Brennan an Insurance Specialist with Redstone Insurance he said there are several things homeowners need to keep in mind.
- Home value vs replacement cost - Replacement cost is how much it would cost to reconstruct your home as it is now. However, if you don’t insure the full replacement cost of your home, you may find yourself responsible for a significant portion of the rebuilding costs in the event of a loss.
- Policy inflation guards -Inflation Guard Provision — a provision that gradually and continuously increases the limit of insurance by a specified percentage over a specified time period. With the steep increase in home prices in our area, even with this provision, you may still be underinsured.
- Extended dwelling coverage - If it costs more to rebuild the home than originally estimated, this type of policy will provide coverage above and beyond the amount of coverage, ranging from 125% to unlimited coverage (depending on your state and insurer). This will help account for increased costs due to inflation.
- Annual policy reviews – Provide your insurance agent with accurate, detailed information about the size, layout, and distinctive features of your home. The uniqueness of your home might add to the value. Make sure you share this information with your agent so he or she can make an informed decision.
For more ways to save be sure to tune in at noon every Friday for WAFF 48′s “Financial Friday” segment.
Copyright 2021 WAFF. All rights reserved.