When it's time to renew homeowners insurance, you should have a clear understanding of your personal risks. Otherwise, you might be paying too little or too much for coverage. Getting the best coverage for your money at the lowest rate is a big challenge for many homeowners. Asking yourself the following questions helps clarify the amount of coverage you need.
On your journey of renewing homeowners insurance, ask yourself if you have enough coverage already. Studies show that about two out of three homeowners lack sufficient insurance coverage. One of the reasons many homeowners are underinsured is that they base coverage on the home's market value instead of its replacement cost. That means if a disaster destroyed your home, you might be paying a big chunk of repair costs out of pocket. A seasoned insurance agent can answer your questions on whether you have adequate coverage.
Low deductibles work for risk-takers better than most homeowners. Generally, if you lead a low-risk lifestyle, you don't need a low deductible, which is the amount you pay to access coverage when you file a claim. You can reduce your monthly premium payments by raising your deductible.
Many insurance companies are in the process of updating their deductible policies from flat to percentage rates. That means a $400,000 home with a 1 percent deductible now equates to a $4,000 deductible. An insurance company is not allowed to change your deductible rate while the term is in effect, but it can alter the rate at renewal time.
Not every homeowner automatically has coverage for water damage from a sump pump failure. Sewage backup can be an expensive problem, so many insurers list it as an exclusion. You can pay more to add a limited amount of coverage for such sewage issues as an endorsement to your basic homeowners plan.
Personal injury claims are becoming more common due to social media, as they may involve libel or defamation. Ask your insurance agent about extending liability coverage to ensure it protects against internet-based complaints. Be aware that you can be held liable for offensive content your child posts online.
Standard homeowners policies cover a broad range of personal valuables inside the home, but not necessarily everything you own. It's advantageous to create an inventory list of all your valuable belongings and share it with your insurance agent. Make sure all your valuable assets are covered since standard plans don't necessarily cover all types of jewelry or electronics.
Homeowners policies are comprised of liability and property coverage. It's important to know the difference between these categories. Liability covers accidents and injuries to others that might occur on your property, while property coverage pays for damage to the home structure and contents. It's wise to get the maximum amount of liability coverage if you regularly throw house parties or invite friends and relatives to your property.
People who assume their homeowners policy covers everything in a liability claim can be shocked to learn that the policy only covers so much. Certain libel or slander claims are simply not covered by a standard plan and require additional coverage.
Selecting the right homeowners insurance at renewal time helps you sleep better at night. Contact the agents at Humble Insurance Group for more information on renewing homeowners insurance. We'll help you understand your options in designing the right homeowners policy for your needs.
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