How good is your homeowners’ insurance policy? Has it been updated since you first took it out? Does it reflect the big surge in home prices over the past ten years?
Insurance can be one of those things you get and quickly forget about. Sure, annual premiums must still be paid, but if the rates haven’t gone up all that much over the years, you may not notice just how much your insurance coverage you really have. Then again, if you live in a Gulf state, then you probably have seen your insurance costs double, triple, and even quadruple in a few short years.
Paying more for insurance doesn’t necessarily mean that the insurance you have now covers all of your needs as it did back then. Your insurance company may have been tracking current housing conditions and adjusting your coverage accordingly, but you can’t guarantee that they have or that their calculations reflect your home’s value.
In addition, construction costs have skyrocketed and subtle changes in your policy may have changed some key provisions, specifically limiting the cap on the home’s replacement value.
So, what is the solution? Answer: find your homeowners policy and check to see if it is adequate for your current needs. If it isn’t, contact the insurance company to adjust your policy accordingly. Furthermore, if you aren’t satisfied with the proposed modifications, start shopping around for a new policy.
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