Don’t Underinsure Your Home
Natural disasters can occur anywhere. Just ask the people in California running from the fires raging there. The pain is just beginning for some of them, though.
After all is said and done, people who lost their homes might be in for a big shock. It’s very likely some of them won’t be able to rebuild their homes, not because they don’t have insurance, but because they don’t have enough insurance. And it can happen to any of us.
When you buy your home, you obviously insure it. Thing is, the policy is based on your home’s value right then. After the recent run-up in home prices, especially in places like California, your insurance may not have kept pace.
Adjusting your homeowners insurance according to the cost of rebuilding your house is a critical step. It’s easy to do - I did it recently. Just call up your insurer and ask what your coverage is. If it’s inadequate based on the selling price of comparable homes in your area, just have them adjust it upward. (Make sure your not insuring your land, though.) Sure it will cost a little bit more, but you’ll know that your house can actually be replaced after a total loss.
As some people in California are about to find out, after a disaster is a really bad time to find out your under insured.
[Image courtesy Meyer Media]
insurance
October 24th, 2007 at 10:36 am
My insurer, Amica, adjusts the rebuilding cost every year. It’s better to buy a $5 report for an estimate and use it compare with what the insurer tells you (they may under or over estimate it).