When purchasing homeowner’s insurance, make sure the policy offers sufficient protection. Do these ten items need to be included in your home insurance policy?
Simply knowing what you’ll need to insure can help you find the best policy for your needs. From there, you can compare the most competitive rates side by side.
However, figuring that out on your own can be difficult, so many people turn to public adjusters to make sure they don’t miss anything. About $91 billion is spent each year by homeowners whose homes are underinsured. To avoid becoming a member of that group, you should focus on the following areas.
Structure of the home
First and foremost, you’ll want to discuss your insurance policy’s dwelling cost with your agent at the insurance company. This sum will be used to replace the entire structure. If your house were to burn down tomorrow, how much would it cost to rebuild it from the ground up, brick by brick or beam by beam?
In the long run, this will be a different figure than the one used to build the house. There are a number of variables that can affect the price of labor and building materials.
Also, keep in mind that your replacement cost of the dwelling is not the property value, solely the cost to fully rebuild the structure.
Renovations
In the process of renewing your homeowner’s insurance policy, remodeling is essential. Is the home’s resale value higher than it was before you started working on it? Kitchen and bathroom remodels, as well as new flooring, are examples of these.
There is no one-size-fits-all answer when it comes to the value of a remodel. Rebuilding costs will be affected, so you should check in with your agent every year to make sure you still have adequate protection in place for events like these.
Additions
In addition to the remodel, your home insurance policy should be revised to reflect the changes you’ve made to the property. Additions like a sunroom, pool, deck, or new driveway and gutters can all raise the overall value of a home and ultimately will require that the dwelling replacement cost increases.
Keep in mind the entire property when deciding how much insurance you need for your home. In the event of a total loss, you would be responsible for both the things inside and outside your house.
The Building Code Has Been Revised
The cost of rebuilding a home that is more than 10 years old is likely to be affected by changes to the building code in your municipality. Most homeowners fail to take this into consideration when calculating the cost of a new home.
A public adjuster can help you account for these types of things so that you don’t miss out on any potential insurance coverage. ‘ You can’t afford to ignore current or pending legislation and how it might affect construction costs, given the increased political focus on the environment in recent years.
Inflation
A yearly inflation rate of 2% to 3% is generally considered to be normal. Economic instability such as the pandemic can cause building materials to rise out of the normal price range for a short time.
Keep an eye on the national inflation rate. The average for building materials like wood, steel, and brick is also interesting to keep an eye on. Consider adding a little extra cushion to your insurance policy in order to deal with unexpected changes in the market.
Belongings of Great Value
Until now, we’ve only focused on the construction aspects of homeowners’ policies. We’ve finally made it inside the house, and it’s time to explore!
Nothing about a homeowner’s insurance policy can be complete without addressing the possessions the policyholder has. You should pay special attention to items that are hard to come by, expensive, or otherwise impractical to replace.
Large electronics, jewelry, family heirlooms, books, and other media are all common themes. Take photos of each room in your house as you go, so you can see what needs to be replaced and how much it will cost.
Understand that homeowner’s policies limit the potential recovery for certain items. In the event that you have personal property that exceeds these limits, it is important to consult your agent and purchase a floater policy. This additional policy will ensure that high-value items, limited by the standard policy, will be properly insured. Also, keep in mind that when obtaining this type of coverage, the carrier will request a formal appraisal of the items listed on the floater policy.
Things You’d Have to Replace on a Day-to-Day Basis
Insuring your home isn’t just about protecting your most prized possessions. Think about the things you take for granted but would miss if they were gone from your life.
If the house were to burn down, new kitchen utensils, appliances, clothes hangers, and furniture would have to be purchased. Consider the cost of a hypothetical Walmart shopping trip and include it in your final tally.
Accounting for the items we would normally not think about is extremely important in reaching the true replacement cost after a loss. As mentioned before, our advice is to take pictures of your entire property. Make sure to include pictures inside of cabinets, drawers, and closets. Keep the digital file either in a cloud or somewhere outside of the property. This documentation will greatly assist Trusted Public Adjusters in getting you what you deserve.
Wardrobe
Clothes hangers were mentioned earlier. Let’s go a step further and discuss the clothing itself! For the sake of everyone who lives in your home, your homeowners’ insurance policy should provide for the replacement of your entire wardrobe, not just for you.
Based on the cost of purchasing a new wardrobe, not the value of your current one. Keep in mind that this is a brand new project. You don’t want to shop at a secondhand store unless it’s something you enjoy doing.
It is important that your policy contains the proper coverage. In our previous articles, we go in-depth regarding Replacement Cost versus Actual Cash Value.
Pets
Do you own any pet kennels, cat trees, or other pet accessories? Even if you lose your dog or cat in a freak accident, everything you spent on it should be documented, even if you don’t have a receipt.
If your pet is particularly expensive, you may want to think about purchasing pet insurance on its own. If not, you’ll still need to keep track of the tangible costs that you’ve invested in the projects you’re working on.
Extra Costs of Living
This is the final step in finding the right amount of insurance for your home. What exactly are we referring to when we say that?
You’ll need a place to stay if your home has been destroyed. It’s a blessing for some families to be able to stay with friends or relatives. That isn’t always the case, though.
Consider how you’ll handle the aftermath of the event. Are you planning on staying in a hotel or an Airbnb for an extended period of time? What about additional costs or lost wages as a result of taking time off from work?
Consider what your life will be like after the transition. Consider your day-to-day expenses and how long it will take you to find a new residence. Make the necessary alterations.
For the Homeowner, Insurance Is Essential
Knowing how much money you’ll need to live on while you wait for your new home is just as important as finding the right homeowner’s insurance policy. In order to get a fair settlement, public adjusters will take into account the value of your home, your personal property, and any market factors that could affect the total cost of your claim.
Give careful consideration to this, and if you need help with your insurance claims, don’t hesitate to reach out. Our public adjusters are here to help you today. Now is the time to schedule your free consultation!