There are so many things to cover when buying insurance to protect your loved ones from financial devastation if your home burns down, if you’re in an incapacitating auto accident, or if you lose your life and can no longer provide for your family. That is why it’s so important to make sure you do not have gaps in your personal insurance coverage that could make your policies inadequate to provide the protection you thought you were buying in the first place. These are some of the important gaps to watch for when buying insurance.
Building Code Compliance
Anyone who owns an older home or a home in an area that has recently experienced a widespread disaster that has led to adjustments in building codes needs to have code compliance included in their home insurance policies.
It is a good idea to have either way as it will pay the costs of bringing your entire home up to current codes if you are legally required to do so. Otherwise you could be footing the bill for that part of the rebuilding process – even on the parts of your home that were not damaged.
Proper Home Valuation
USA Today reports that nearly 60 percent of homes in 2013 were undervalued for insurance by an average of 17 percent. When you’re talking about several hundreds of thousands of dollars for a home, that is a lot of money you’ll have to make up for elsewhere when rebuilding.
Some people believe they only need to insure their homes for the purchase price. That is a wholly inadequate amount of coverage considering there are costs beyond simply rebuilding the home to consider. There are things like code compliance, debris removal, materials, labor (at current costs), and other contributing factors.
Failing to Factor in Improvements
Anytime you put a new roof on your home, install a new furnace, remodel your kitchen, or replace your carpet with hardwood flooring you’re changing the value of your home and need to adjust your insurance coverage accordingly. Otherwise you would find yourself facing a tremendous shortfall should tragedy strike.
Inadequate Liability – No Umbrella Liability Insurance
The more litigious society becomes, the more important liability coverage becomes for homeowners from all walks of life and not just the super wealthy.
No Flood Protection
FEMA reports that 25 percent of all flood insurance claims filed with the National Flood Insurance Programs are located in areas that are designated as low-risk areas for floods (that doesn’t even account for the households in these areas that don’t have flood insurance protection and can’t file claims). What this means is that there is no such thing as an area that is safe from flooding. All 50 states have had flooding events.
Don’t allow gaping holes in your insurance coverage to catch you off guard. Work with an independent agent, like us here at BOLT Insurance Agency today to review your existing policy and consider areas for improvement. Then revisit your policy annually to account for potential changes that should be addressed.