What to Look For in Your Homeowners Insurance Coverage

Home ownership, while very exciting, is also an immense responsibility. A responsibility to protect your investment. Homeowners insurance is much more than another mandatory coverage you have to have to obtain a loan.   It is a way to protect your investment and your financial stability in case of a major loss.

While everyone loves to save money, in this case it’s extremely important to make sure you have adequate coverage. The minor savings in premium you will get for buying too small coverage amount or not paying for extra needed endorsements, could mean a loss of tens if not hundreds thousands of dollars. It is simply not worth it.   See below few coverages / endorsements to look for when reviewing your homeowners quote.

Extended Replacement Cost – This property valuation coverage has to do with how the property is valued in a claim situation. Replacement Cost means that the insurance company will pay for what it costs to rebuild the house as it was, without taking depreciation into account, up to the policy limit (Actual Cash Value only pays for the cost to rebuild less depreciation). Extended replacement cost is an even better valuation for the homeowner as it tacks an additional 20%-25%  to your policy limit. Which means that if your policy building limit is $1,000,000, in the event of total loss, the maximum the insurance company will pay is $1,250,000 (if extended replacement cost was 25%).  This is valuable since the labor / material costs can go up significantly very fast. This coverage costs additional premium but provides a much better protection.

Automatic Inflation Guard – This is an additional endorsement a homeowner can purchase to further safeguard their policy limit. Automatic inflation guard will automatically increase the policy limit on the property (building or contents) at every renewal by a percentage specified by the carrier. While reviewing and adjusting your coverage every year is important, life gets in the way and we don’t do it. This additional endorsement increases your limit to protect the homeowner from sudden raise of materials / labor costs. Of course no endorsement should replace reviewing your policy limits regularly.

Note Limits on Jewelry – If you or your spouse have expensive jewelry, make sure to schedule them separately on the policy. Do not rely on the jewelry coverage in the standard policy may not cover the total value of your jewelry.

We know that shopping for insurance is a tedious process. Let us take this burden off you, while explaining all coverages and details along the way.

We’ll also be happy to review your policy and make sure you are getting all the discounts you can.  Call us at 813-681-1832, or request a quote.