Most homeowners have some form of insurance policy for their property. After all, your home is almost certainly your biggest asset. Purchasing real estate is a big deal; most people want to protect their house in any way possible. While purchasing homeowners insurance isn’t required if you’re buying a property outright, most mortgage lenders will oblige a buyer to get insured.
There’s a good reason for that! If anything disastrous should happen to your home — a fire, a break-in, a tree falling on your roof — the lender can still recoup their investment. Plus, you’ll be able to pay for repairs or rebuilds when necessary. But what happens if your homeowners insurance doesn’t quite cut it? You’d hate to discover you don’t have as much coverage as you thought you did after disaster strikes. The time to explore insurance options is now, before the flood or the fire. Let’s look at how you can know if your home insurance has you truly covered.
Check Your Insurance Policy
You may have noticed inflation impacting your overall cost of living, but have you thought about how inflation is impacting construction costs? If you’re like the vast majority of homeowners, the answer is probably no. According to a recent survey conducted by PolicyGenius, just 9% of homeowners added to their coverage amount because of rising construction costs — even though costs have risen by a whopping 16.3% since 2021! This means that your policy might not be up to snuff, even if it was plenty and more four years ago. Also, it’s worth taking extreme weather into account when it comes to home insurance. A lot of standard home insurance policies don’t include flood insurance, which is fine. Unless, of course, there’s an uptick in hurricanes and tropical storms. The Wilmington area, and more generally, the region surrounding the Cape Fear River, has seen a marked increase in extreme weather patterns. According to Risk Factor, a site dedicated to scientific analysis of property risk due to climate change, nearly a third of Wilmington properties are at risk of flooding during the lifetime of their mortgage. When you consider that 90% of U.S. catastrophes involve flooding of some kind, it’s clear that adding flood coverage is a smart move for any homeowner in Hurricane Alley.
Speaking of rising construction costs, if you’ve updated your home in any way it may impact the viability of your homeowners insurance. New roof? Bathroom renovation? HVAC replacement? Electrical update? Any and all of these updates will probably raise the value of your home. If you don’t examine the coverage on your insurance policy, though, it won’t keep up with those upgrades. Which means that, if something should happen to that gorgeous new roof, you might end up paying for it all over again. In order to know if you’re truly covered by your homeowners insurance, you need to know the replacement cost of your home. That replacement cost isn’t a static number, it changes as you make changes to your home. Despite this, 37% of Americans haven’t reviewed their home insurance policy in the last year to see if it’s sufficient. Further findings from PolicyGenius show that only a third of U.S. homeowners are sure their home insurance has them covered, a perilous condition for anyone to be in. For this reason, it’s a good idea to have an independent appraiser examine your home from time to time, just to make sure you know how much it would cost to rebuild it if that day ever comes.
Cheapest Isn’t Always Best
Understandably, most people are looking at the price tag when choosing home insurance. Of course, everyone wants to minimize their monthly expenses wherever they can. That being said, when it comes to protecting your most important asset, a cheap premium isn’t the only factor you should be thinking about. When you’re looking at a home insurance quote, you should be taking the long view. You may not like the idea of a slightly higher premium on a month-to-month basis, but the extra coverage means your safety is ensured. And that sense of security is truly priceless.
To learn more about how your homeowners insurance options can offer peace of mind, reach out to the professionals at THG Insurance. Our team of experts knows the ins and outs of the insurance industry. Call 910-338-1773 or contact us to find out how to keep your home safe today.