Six Ways to Ensure Your Home is Not Underinsured

A home is probably the largest investment a person will make throughout their lifetime. Therefore, you want to ensure it is adequately insured. Unfortunately, two out of three homes across the country are underinsured by as much as 60 percent or more. This means that when disaster strikes you may be unable to financially rebuild your home.

To avoid this happening to you, here are six ways to make certain that your home is adequately covered:

  1. Don’t be a Penny Pincher – Don’t opt for the lowest possible premiums. Simply request that you receive quotes for the best possible insurance coverage for the amount of money that you can afford.
  2. Consider Disaster Coverage – Homeowners insurance does not cover damage caused by floor or earthquake. If these are high risk possibilities in your area, you may want to consider adding disaster coverage.
  3. Examine your “Loss of Use” – Found on the declarations page, this pertains to your habitat while you are rebuilding your home, such as rent and other related living expenses. In most cases, it is better to opt for a higher limit.
  4. Choose “Replacement Cost” Over “Actual Cash Value” – Replacement cost will help you replace your household items that are on your insurance policy at the price it costs to replace rather than its value when the items were destroyed.   
  5. Estimate Replacement Costs Online – There are several sites online that will walk you through a questionnaire to provide a range of estimates on how much it would cost to replace your home. It takes into account construction labor, but does not take custom features into account.
  6. Compare Estimate with Homeowners Policy – Your policy limits are on your declarations page and you can compare the above estimate with your limits to see if your home is underinsured.

Is your home underinsured? If you aren’t sure or want to discuss your homeowners insurance policy, contact us today at Prutting Insurance Group. We strive to deliver the highest quality of customer