When a new homeowner is about ready to close on their new home the one major piece of paper
that the buyers have to bring with them to the closing would be a fully paid homeowners policy. Without this - you simply can not close.
But what happens to people who bought homes 2,5 or 20 years ago? I am sure that their policy is still in effect and most likely the premiums are paid via escrow, so most homeowner don't think of the policy anymore unless a catastrophic accident happens. Which I know would be true for me.
Until Now..
Why you should check on your homeowners insurance.
Let's just make this clear - the policy is not based on the MARKET VALUE but more like the cost that would be incurred to rebuild or replace. If a homeowner invested 50,000 or more into their home, most likely the homeowner did not up the value of their home with their insurance agent. So, the policy will be less than what the home will cost to rebuild. This includes any renovations, repairs and upgrades that a homeowner has completed. Today to build a quite modest house in Queens could cost you more than you have on your policy.
Another reason why you should check on your homeowners policy is because the insurer could have changed your policy. Insurance companies are always changing and "updating" policies - sometimes not for the benefit of the homeowner either. So the homeowner might think that they have flood insurance, because they bought the policy with it, but unknown to the homeowner the insurer stopped writing policies with flood a long time ago. So homeowners need to pay close attention to what's in their policies.
Make sure you add this to your "Honey Do list".
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