Many homes in the United States are underinsured. This can happen when people decide to skimp on their homeowner’s insurance as a way to cut costs or don’t have a full understanding of what their policy covers. People also tend to forget to work with their insurance provider on adjustments when making changes or renovations to their property. Make sure your policy covers all that your home is truly worth, even for worst case scenarios. ServiceMaster Elite Cleaning Services has seen the damage a disaster can do to a home by providing restoration services for Southern Louisiana homes damaged by water, mold, fire and smoke. You may not always be able to prevent these disasters from happening, but you should feel confident that your home is properly insured to pay for repairs in case they do.
Know What Your Policy Specifically Covers
Reading through a home insurance policy takes time but knowing exactly what coverage you’re paying for will give you a better idea of what your out-of-pocket expenses would be in case of a disaster. As an example, homeowner’s or renter’s insurance usually doesn’t cover flood damage, the most common and costly natural disaster to happen to a property. You would need to buy a separate policy to cover the costs associated with repairing those damages.
Reconstruction Cost is Different than Market Value
Reconstruction Cost is the estimated cost to entirely rebuild your home from the foundation up with similar materials and/or quality. This becomes especially important to consider when it comes to older homes that may require unusual or scarce materials expensive to find or duplicate.
Market Value is what a willing buyer would pay to purchase your home, taking into consideration the lot and location. Do not assume that coverage matching your mortgage balance is enough to completely rebuild your home. The amount of insurance you buy should reflect reconstruction costs, not how much your home is worth on the current market.
Remodels or Home Improvements Change Value
If you’ve added a new master bathroom or recently remodeled your patio, you’ve just increased the value of your property. This means you also need to adjust your insurance to reflect that new value. Meet with your agent and let them know you’ve added or remodeled parts of your home. Review your homeowner’s insurance policy every other year with your agent to make sure that any changing circumstances of your property are included in the policy.
Inventory Your Personal Possessions
It’s unlikely that you’ll remember everything stored in your garage after a disaster damages a greater portion of it. Create a digital document of your most important personal items so this information is ready for your agent. Consider buying an optional replacement cost coverage plan for personal belongings, as some policies only cover the current value of your possessions, not what you originally paid for them. That way, your damaged items can be replaced with new ones.
If you’re ever unsure about what is involved in your policy, call your insurance agent and ask to meet with them. As a homeowner, it’s important to feel safe in knowing that you have sufficient coverage for the value of your home and possessions. And if you ever find yourself with a property disaster, call the pros at ServiceMaster Elite Cleaning Services at (800) 932 – 9940. We’ll restore your property to pre-loss condition, work with your insurance company and most importantly, restore your peace of mind.