The recent impact of Hurricane Ian only added to the woes of the home insurance industry and unfortunately premiums are likely to rise even higher than the direction they were going previously. So in order to try to keep rates as low as possible, everyone should take a fine-tooth comb to their homeowners' policy every year to evaluate their coverage. There are several areas of an insurance policy that should be investigated for rate lowering strategies. Some of these include...
Coverage Parameters:
Coverage parameters are one of the reasons to take a closer look at your policy, particularly considering the increasing regularity of natural disasters throughout the country. Many policies don't automatically include coverage for earthquakes or floods, for instance, but few people realize they lack coverage until they file a claim and it's too late. Following are a few steps you can take to ensure that you have adequate coverage at an affordable price.
Coverage Amount:
When determining the amount of coverage you need, focus on the house itself. Obtain a current square foot replacement cost from your regional homebuilder's association (not your home's appraised value, as that includes land costs, which may be as much as 50 percent) and multiply your square footage by that number to determine your coverage need. If your area is prone to one or more natural disasters, it may prove cost-effective to pay a bit more to secure a guaranteed replacement policy and avoid inflated labor/material costs if such a disaster occurs.
Disaster Insurance:
Speaking of disasters, don't presume that you are covered. As aforementioned, many homeowners don't realize they lack coverage for specific calamities until it is too late. Read the fine print. Generally, most policies don't cover damage from flooding, earthquakes, or landslides. They also commonly exclude mold, broken pipes, sewage backups, and a host of other routine-maintenance-related susceptibilities. Adding a couple hundred dollars worth of coverage for specific problems such as these could save tens of thousands in damages over the long term.
Cost-Effective Packages:
Premiums will inevitably shift over time, but homeowners generally want to base their policy on the highest deductible they can afford to obtain the most competitively reasonable premium. Whether you have a flat rate deductible or one based on a percentage of the insured value, check your numbers annually to make sure you've obtained the most cost-effective package you can get based on your current income and coverage needs.
When you've secured the best possible policy, conduct a home inventory. Collect relevant documentation and store it, along with your insurance policy, in a fire-safe lockbox or in a secure cloud account. Keeping a digital copy of these materials can provide additional peace of mind in case of an emergency.
As a result of today's conditions regarding homeowners' insurance, it is more important than ever to have Your J.P. Perry Insurance agent help you analyze your coverage and guide you to the best possible results.