If you’re like a majority of Americans, then it was probably when you purchased your home. Since most mortgage lenders require proof of insurance to complete the closing paperwork, you might not have had a lot of time to compare insurance companies. Or get into too much detail about the provisions of your policy. Since then, your insurance agent has (hopefully) asked you to review and update your plan. But if it’s not broke, why fix it? Well, at the very least, you should take a closer look at these areas of your homeowners’ insurance. Just in case.
Your Property Limits
Chances are, you have more stuff now that you did when you originally moved in. Which means, your initial policy limits may not be sufficient for your needs today. Remember, your homeowners’ insurance is meant to cover the value of your possessions. Including your high-end electronics, jewelry, art, etc. With the more expensive items, you may even have to schedule them to ensure you’ll be fully reimbursed in the event something happens. It also covers the value of your home—including your home improvements. So, if your house has appreciated since you first bought it, we’ll want to make sure your policy takes that new value into account. Especially following expensive renovations, we want to help protect your investment! New appliances, luxury finishes, and the cost of the labor may all need to be factored in. But, we have to know about these things in order to help you properly insure them.
Your Policy Type
Did you know there are two main types of homeowners’ insurance? Better yet, do you know which one you have? If not, you’ll want to check that. Sometimes, when policyholders are trying to save money, they sign up for an actual cash value plan. The premiums tend to be lower, but that’s because this type of policy pays claims after factoring in depreciation. We also offer replacement cost homeowners’ insurance, which doesn’t consider the current value of your property and possessions as much. Instead, it pays claims based on how much it would cost to replace them. Because this plan usually pays better benefits, it can be more expensive. At Freedom Insurance Agency, we can help you compare the two based on your specific needs. If nothing else, we can help you better understand what you currently have, so you know what to expect when you need to file a claim.
Your Liability Limits
We already talked a little bit about limits, but liability coverage can be much broader. When it comes to this protection, it’s not necessarily about how much you have invested in your property. Instead, we have to take a more comprehensive look at your assets. Liability deals with your legal exposure. So, if someone’s injured on your property or your family member accidentally damages another’s home, car, etc. you wouldn’t have to face all the damages on your own. Because these incidences often involve legal fees, medical expenses, punitive costs, and more, we want to be especially careful about what limits we put in place. While $750,00 sounds like a high limit, if you end up having to pay a million-dollar settlement as the result of some accident, you could end up paying $250,000 out of pocket. Therefore, it’s important to know what liability limits you already have in place and adjust them, as needed.
Hopefully, we raised a few good questions for you today! Now, if you need help finding the answer(s), come to Freedom Insurance Agency. Not only can we help you decipher your current policy provisions, but we can also make knowledgeable recommendations based on how your life has changed over the years. It’s always good to review your homeowners’ insurance periodically and ensure you have the proper protection in place. Let us know how we can assist you!