How To Review Your Homeowner Insurance Coverage

June 28 is National Insurance Awareness Day. Although it’s not as much fun as Talk Like a Pirate Day, it’s a valuable reminder for savvy homeowners. Conducting an annual review of your homeowner’s insurance policy can contribute to your peace of mind all year long.
Is your homeowner’s insurance doing its job?
You’re probably familiar with the basics of homeowner’s coverage since it’s mandatory if you have a mortgage. Here’s a rundown of the types of losses it may cover, including some additional coverage you may want to add if you don’t carry it now.
Basic coverage may include dwelling coverage. It pays for damage to your home and detached structures, including sheds, fences, and garages up to the limit you specify. It will also include Personal property coverage, which pays for repair or replacement of your home’s contents, such as furniture, appliances, electronics, and clothing if they are damaged by a fire, weather, or stolen during a burglary. If you haven’t yet made out an inventory of your personal property, now’s a good time to consider doing so. A phone app like Sortly can help simplify this task.
More coverage = more peace of mind
You may have options to bump up your basic coverage, which can save money if and when you file a claim. One option is replacement cost coverage. Instead of actual cash value coverage, which factors in depreciation to your possessions before issuing payment, replacement cost coverage will provide you with a bigger payment. This coverage helps you replace items at today’s replacement cost, so you won’t have to make up the difference yourself.
Other options to consider
  • Liability and medical protection protects you in case someone injures themselves on your property and files a claim against you.
  • Loss of use protection pays for your living expenses if your home is too damaged for you to inhabit while it’s being repaired or rebuilt.
  • Valuable items protection does just what it says. It provides additional coverage for jewelry, antiques, fine art, electronics, computer equipment, and more.
Specialized coverage to help cover more bases
Flood insurance is often overlooked by homeowners if their mortgage lender didn’t make it a mandatory purchase. But even if you’re not in a low-lying area, it’s worth checking out the Federal Emergency Management Agency’s (FEMA’s) Floodsmart web site. According to FEMA, people outside high-risk flood zones file more than 20% of all flood insurance claims.

Earthquake insurance can sometimes be added to a standard homeowner’s insurance policy, although you may have to purchase separate, stand-alone insurance. The risk of being affected by an earthquake isn’t limited to California – check out this online map to see if you should look into adding coverage.

Umbrella coverage picks up the slack from anything not covered by the coverages already described here. It protects you from major claims and lawsuits – things most of us would never anticipate until they happened. It kicks in when the liability protection provided by your homeowner’s insurance and auto insurance is maxed out, or doesn’t offer protection for a particular incident.
Here are some situations where umbrella coverage can make a difference: property damage, liability coverage on rental units you own, malicious prosecution, libel, slander, and other personal liability situations. For example, if a neighbor’s child is injured on your back yard trampoline or bitten by your dog, or if your car is totaled by an under-insured party, umbrella coverage could save the day. Click here for examples of claims covered by umbrella coverage.

If you have questions about homeowner’s insurance, contact your insurance agent or your Stearns Loan Originator. We can help you manage every aspect of home ownership.

The considerations posed in this blog are for informational purposes only and should not be considered legal advice or advice of a registered/licensed insurance agent.

- Jun 12, 2020