Just because property values are down doesn't mean your homeowner's insurance is up to date

Real Estate Agent with HomeSmart Realty West CalBRE #01458572


Just because property values are down
doesn't mean your homeowner's insurance is up to date

http://www.missionvalleycondos.infoJanuary is a good time to review your homeowner's insurance policy to make sure that it is up to date. Many people believe that the value of their homes, especially when the value declines, means that if something happens, there's enough homeowner's insurance to cover it. That's not necessarily true.

The current value of your home has absolutely nothing to do with what it would cost to rebuild it if it's destroyed in a wildfire, earthquake, or flood. Instead, the cost to rebuild your home will be predicated on the cost of building materials and labor, and those rarely decrease like the value of your home does.

http://www.missionvalleycondos.infoIt is not the tax assessor's job or that of your insurance company to make sure that you have adequate homeowner's insurance. That responsibility falls to you. The best person to contact about your specific home would be a building contractor who is familiar with your neighborhood and can look at the specific features of your home and give you a cost-per-square-foot estimate to rebuild it.

With those figures in hand, call your insurance representative and have him update your policy. There is a possibility that if you are increasing it substantially, he might want to see the estimates provided by the building contractor.

http://www.missionvalleycondos.infoIs being underinsured a common occurrence? If we look at what happened in the October 2003 and October 2007 wildfires which destroyed thousands of homes in San Diego County, fully 66% of those affected reported being underinsured. That means that they had to come up with a significant amount of money to rebuild their homes.

Be sure to look at your deductibles, too, since a higher deductible can mean lower monthly premiums. With a higher deductible, you'll be encouraged to pay for those small things out of pocket rather than filing a claims. This helps because too many small claims might cause your insurance company to drop you. Personally, I like a $1,000 deductible, but your circumstances might be different.

http://www.missionvalleycondos.infoAlso be sure to check on flood and earthquake insurance. People think that we don't have floods in San Diego since it's a desert, but the floods of December 2010 say otherwise. Earthquake insurance is usually excluded from homeowner policies, so you'll need to buy that on your own, usually from the California Earthquake Authority. To find approximate premiums for earthquake insurance for your home, visit earthquakeauthority.com.

Remember, if you don't have flood or earthquake insurance, you have 100% deductible, and that's not good for your bank account. Don't risk more than you can afford!


If you're looking for a great real estate agent in San Diego, well,
let me Google one for you.

I'm available 24/7, so feel free to contact me by phone or email.

Jim Frimmer, Realtor
Century 21 Award Mission Valley
California DRE License #01458572
Mission Valley Condos Information


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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Nevin Williams 01/13/2011 12:44 AM
Home Improvement
California San Diego County
Condo Specialists
Advice for Sellers
Advice for Buyers
Condos & Townhouses
homeowners insurance

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Pat Yoest
Century 21 Aadvantage Gold, 702-719-2100 - Las Vegas, NV

You make a valid point.  With all the devastation in floods, huricanes, tornados and earth quakes, building materials have had to skyrocket.  It might be a good idea to check and reavaluate your insurance.

Jan 12, 2011 07:10 AM #1
Lynda White
Bluegrass Homes & Farms Realty, Agent Know How - Louisville, KY
Admin. Mgr., Keller Williams Realty

There are so many natural disasters going on now it makes my head spin! Jim, that is good advice.

Jan 12, 2011 07:16 AM #2
Heather Tawes Nelson
Realty ONE Group - Scottsdale, AZ
Associate Broker, ABR, CLHMS, CRS - Scottsdale, AZ

There are some great points here. Most folks get home insurance and never think about it again, except to pay the bills. It is definitely worth going back over what coverage you have and see if you need to adjust or add anything.

Jan 12, 2011 07:35 AM #3
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

You would be surprised (or maybe not) about how stupid Insurance Companies and Underwriters can be.  Get the Guaranteed Replacement Cost Coverage.

Jan 12, 2011 07:44 AM #4
Connie Goodrich
Keller Williams Realty - McKinney, TX
CRS ABR (McKinney Realtor)Texas

Another heads up, be sure the extract the value of the land from their estimate, that is a favorite thing for us to catch on our insurance as they try to escalate it up.  Good info!

Jan 12, 2011 10:42 AM #5
Jack Mossman - The Nines Team at Keller Williams in Lodi
The Nines Team at Keller Williams in Lodi - Lodi, CA
The Nines Team in Lodi

Jim - Another very valuable tip ... review annually, and modify as needed.  Thanks for the reminder!

Jan 12, 2011 01:30 PM #6
Michelle Francis
Tim Francis Realty LLC - Atlanta, GA
Realtor, Buckhead Atlanta Homes for Sale & Lease


Great reminder to keep insurance up to date!  It's almost mind-boggling the number of things to keep up with:-)

All the best, Michelle

Jan 12, 2011 02:57 PM #7
Toronto, ON

Jim - It is always a good idea to keep your insurance policy up-to-date.  Yiou may have also bought more contents that need to be insured.

Jan 12, 2011 11:21 PM #8
Nevin Williams
Sierra Pacific Mortgage Raleigh - Raleigh, NC
Raleigh Mortgage Pro

Jim - This is a great topic to blog about!  As some of you in the Rain know I am also a licensed property and casualty insurance agent and what Jim is saying should be heeded.  

I'll throw in something else you may not know,  you should shop for new insurance every two years.  This is because most companies slash their prices to attract new customers and then they slowly begin to raise premiums.  Before you know it 10 years has lapsed and you are paying 25% more than you should for the same coverage.  

Also if you own your home free and clear or have a sizeable amount of equity you'd be smart to insure it against just about everything.  If you don't and then lose your home to a peril that is not covered, you just lost your life's savings. Examples:  Sink holes, earthquakes and flood.  These are not covered in a basic policy. These are separate coverage. This is one reason why I do not agree with paying off a home but rather invest the money in a tax deferred investment vehicle instead.

Jan 13, 2011 12:41 AM #9
Jim Frimmer
HomeSmart Realty West - San Diego, CA
Realtor & CDPE, Mission Valley specialist

Hey, everyone Thanks for stopping by.

As usual, I get way behind in checking the comments to my many blog posts, so that’s what I’m doing this evening, trying to catch up.

I’ll read through all the comments to see if any of them need a specific response. If so, I’ll respond below this comment. Thanks again for stopping by and commenting. I really do appreciate it, and I’ll be by your blogs soon to do some reading and commenting soon.

Happy new year to everyone!

Jan 18, 2011 01:43 PM #10
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Jim Frimmer

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