Will Your Homeowners Insurance Policy Be Enough?

According to a survey by J.D. Power and Associates, a well-respected market research company known worldwide, more than 60% of American homeowners are under-insured on their homeowner coverage. By extension, this includes Greensboro home insurance policies as well as others sold throughout the Triad Region.

Under-insured, in this case, simply means that the amount of home insurance Greensboro homeowners have elected to maintain for their financial protection against losses from covered perils to their homes and property are likely inadequate. If a major loss were to occur, such as your home burning to the ground and taking everything you own with it, there's a chance your homeowners insurance would not have the benefits needed to build your house back to the way it was (or build a new house of like or equal value) and replace all your lost personal possessions. This doesn't even take into account the fact that flood insurance is not covered at all in a typical homeowners policy but must be obtained separately from the federal government's National Flood Insurance Program.

Things Change

Many homeowners, when buying a new home, elect to purchase the minimum amount of homeowners coverage required by their mortgage lenders to cover the lender's financial exposure. As the balance on the mortgage is slowly paid down, the mortgage lender's financial exposure also lessens. Yours, however, likely increases as the value of your home goes up and the cost of replacing it also becomes more expensive. Any additions, upgrades or remodeling will also tend to increase the value and, unless you increase your insurance coverage to take into consideration this increase, you'll most likely be under-insured.

The same goes for the personal property in your home. Most homeowner insurance policies have express limits on the amount they'll pay out on certain claims for items lost, destroyed or stolen. This probably affects the coverage applicable to the following types of items in your home:

• Electronics, including computer equipment
• Furs
• Artwork
• Collections, such as stamps, coins, rare books, baseball cards, etc
• Jewelry
• Silverware and more

If the limits on these items are too low to cover their replacement, you should consider adding an endorsement to your coverage or buying a separate “floater” applicable to specific items. It's a good idea to have an annual insurance coverage “checkup.” Get with your agent and determine if what you currently have is enough to adequately meet your needs.