Protecting Your Home Sweet Home

Is Your Home Adequately Insured?

A common topic of conversation among my friends and colleagues goes something like this, “Property values have really gone up lately! Does that mean I should update my homeowner’s insurance policy?” Before I can answer the question, I always make sure there is a clear understanding of the types of insurance policies to choose from. It’s not a one size fits all scenario. So first, let me give you a quick overview.

Policies are fully customizable but will always include standard elements. Standard coverages usually include damage to the interior or exterior of your home due to fire, hurrianes, lightning, vandalism, and some other covered disasters. Your insurer will compensate you so your house can be repaired or even completely rebuilt. Destruction from floods, earthquakes, and poor home maintenance are generally not covered and require separate riders for that level of protection. Sewer and drain backup coverage is also an add on. And remember, freestanding garages, sheds, or other may also need to be covered separately.

In the U.S., you can expect to choose between three types of homeowner’s insurance:

1. Actual cash value. This covers the cost of your home plus the value of your belongings after deducting depreciation (i.e., how much the items are currently worth, not how much you paid for them). It is determined by deducting the depreciation of a damaged or stolen property at the time of the loss from the replacement cost. Ultimately, it’s the actual value for which the property could be sold, which is always less than what it would cost to replace it.
2. Replacement cost. This type of policy covers the actual cash value of your home and possessions without the deduction for depreciation, so you would be able to repair or rebuild your home up to the original value.
3. Guaranteed (or Extended) Replacement Cost. This is the most comprehensive policy. It will pay for whatever it costs to repair or rebuild your home even if it’s more than your policy limit.
   

There are always reasons you should update your policy. Those include life changes such as a home renovation, rebuild, or addition. If you’ve installed a security system or upgraded to an improved system. 

But there is another reason to consider updating your policy limits – market value shifts. Homeowners’ coverage amounts are based on the home’s value at the time the policy was written. Which is why it’s essential your coverage keeps pace with your home’s value.

Changes in the market may not only affect the value of your home, but the cost of building materials as well. We also are aware – more than ever – of how the supply chain and availability of materials can cause issues, (ahem…like we saw during the pandemic). We all know the concept of supply and demand. So, what once may have been an adequate level of homeowners insurance may no longer be adequate and you may want to think about upping your policy limits.

I highly recommend Patriot Home & Auto Insurance. They are KW Metro Center’s in-house insurance provider and will provide an unbiased brokerage assessment of multiple insurance companies to fit your needs. They do legwork to provide a curated selection of insurance options based on quality and value. They are an expert in the field of insurance, and I am confident they will provide you with exceptional service and work diligently to assess your insurance needs, ensuring you have the proper coverage to protect what matters most to you and your family. All it takes is a brief conversation to gather the necessary information for a customized quote that suits your specific needs. Visit their website at www.patriotha.com to start the process to secure insurance coverage that suits you best.

Contact me and I’ll get you connected directly with an insurance agent that is dedicated to helping you keep our most valuable asset protected.