Purchase The Right Amount Of Home Insurance

By
Mortgage and Lending with CrossCountry Mortgage, LLC NMLS #3029 NMLS #126036

For most people, their home is the most valuable investment they will ever make. Therefore, it needs to be protected. This is where homeowners’ insurance is critical. At the same time, buying the right amount of homeowners’ insurance can be a bit of a challenge.

A home that is underinsured leaves the homeowner vulnerable to situations involving fires, floods, and theft. On the other hand, nobody wants to throw away money unnecessarily by over-insuring the home. How can everyone purchase the right amount of homeowners’ insurance?

Review The Coverage Every Year

First, people’s needs are going to change from year to year. Therefore, everyone should review their policy annually. For example, actual cash value only reimburses someone based on the current condition of the home. For example, if a home was built ten years ago, the actual cash value will only provide someone with the depreciated value of the home and not the original value. While this might be enough at the beginning, it may not be enough ten years from now. Everyone has to make sure they purchase enough insurance to cover the cost of rebuilding the home, excluding the cost of the land.

Overlooking Valuables And Liability

Another common mistake that people make when it comes to homeowners’ insurance is overlooking issues such as valuables and liability. Most people have enough insurance for the structure of the home. Most people do not have enough insurance to cover liability claims and valuables. Liability claims might arise if someone gets hurt on the property and the homeowner gets sued. Valuables are important if the home burns down or if someone steals something from the home. All homeowners must have enough homeowners’ insurance to protect themselves against potential liability claims (such as someone slipping and falling in the home) and the loss of valuables (such as electronics and jewelry). Everyone has to make sure they document these valuables appropriately.

Purchase The Right Amount Of Homeowners’ Insurance

Make sure you include everything to purchase the right amount of homeowners’ insurance. Review current construction costs as part of the process. Finally, review the fine print of the homeowners’ insurance policy every year to avoid being underinsured or over-insured.

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For help or questions contact:

Joe Gonzalez

Senior Loan Consultant -  NMLS #126036
GMH Mortgage Services, LLC
625 W. Ridge Pike, Building C, Suite 100 | Conshohocken, PA  19428 | Direct: 610-355-8039 |  Cell: 610-739-6563

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Comments (3)

Dan Hopper
Dan Hopper - Gold Way RE - Westminster, CO
Colorado Broker / Referral Services

Very important homeowner's insurance,   ... over the last 15 yrs with the up and down values of homes, many homeowners just did not pay attention to this value issue on their insurance.  Good reminder that EVERY year you must review and determine the right policy amount.

Dec 15, 2020 10:04 AM
Joe Jackson
Keller Williams Capital Partners Realty - Columbus, OH
Clintonville and Central Ohio Real Estate Expert

You make some great points...we have to make sure we have enough coverage for what's inside the home as well! Thanks for sharing!

 

Dec 15, 2020 10:06 AM
Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

Great information.  Thanks for sharing and enjoy your New Years Eve!

Dec 31, 2020 07:44 AM