The most important part of your homeowner policy is your “dwelling” coverage. If your home suffers damage or a total loss your policy must have the proper limits to ensure your home is repaired or rebuilt.
BEING UNDER INSURED
Over the past ten years in Arizona and California there have been several major forest fires that have destroyed dozens and dozens of homes. Unfortunately some of these homeowners discovered that their homes were under insured.
HOW CAN A HOME BE UNDER INSURED
The most obvious culprit when a home is under insured is simply that an agent and the homeowner did not review the insurance coverage over a course of several years. Just understand that what goes into building a home - lumber, labor, wiring, plumbing, flooring, counters, doors, windows (and more) has increased dramatically over the years. A home that might have cost $80 a square foot to build ten years ago may cost $120 per square foot today. If you fail to update or review your homeowner policy it is highly possible that your home will become under insured as a result. The key to having the right coverage? Review your policy with your agent every one or two years, at most.
WHAT IF I BUILD ONTO MY HOME?
Many homeowners are discovering that it is better to add square footage onto their existing home that move into a larger one. When that happens, you have to notify your existing insurance agent and carrier. They will need to recalculate your dwelling coverage based on the new square footage and possibly increase your premium. Some optional items on a home policy to consider buying - water backup, jewelry coverage, and ID
theft. While optional, they are usually fairly inexpensive to add.
