How Much Insurance Coverage Do I Need?
By Ana Cristina Rossi, Esq.
Everyone knows that if they have a mortgage on their home, they need to have a homeowner’s insurance policy. But what many people don’t know is how much coverage they really need.
This is a very important question to know the answer to because if your home is completely destroyed in a hurricane, fire, tornado, or other peril – and it is underinsured – you can be looking at a very serious problem. Some researchers suggest that as many as 80% of American homes are underinsured – a figure which is shockingly high.
Consider The Cost
To ensure that you have enough insurance coverage, you need to determine how much it would cost to rebuild your home and replace its contents in the event of a total loss.
You can start with getting an estimate from your agent.
Be sure to include all pertinent information regarding your home including the number of bedrooms, bathrooms, square footage and any upgrades that have been completed which will add value to the home. For older homes which may not be up to current structural codes, you want to be sure that your policy carries an “ordinance or law” endorsement which will help to cover the cost of rebuilding your home to current code standards.
Consider The Time
So when is the best time to modify your insurance coverages?
Ideally, the best time to do this is a few months before your current insurance policy expires. The reason for this is because you are limited to what you can change during the life of your policy. For example, if you realize that your hurricane deductible is higher that you would like it to be just before hurricane season rolls around, it’s unlikely that your carrier will allow you to change it.
As always, you can give us a call at 407-478-4878 if you have any questions about your homeowner’s insurance policy!
Ana Cristina Rossi, Esq.
Learn more about Ana Cristina here!
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