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Insured Just Right

As your local independent insurance agency, we take pride in keeping you in the loop about insurance. We want you to know what insurance is truly about and how to get the most out of your insurance policy. We’ll never miss a chance on telling you why a robust policy is the best. However, we’re aware that the most inclusive policy isn’t ideal for every single individual.

Is too much insurance necessarily a bad thing? No, of course not. However, if your homeowners insurance policy is breaking the bank, it can be. If your high-limits policy is over your budget, you could ask your independent insurance agent if it’s possible that your home is over-insured. You may be surprised to hear this, but being over-insured is possible under specific circumstances.

What does it mean to be over-insured? This means that the insurance policyholder has purchased coverage that greatly exceeds the value of the item being insured.

Don’t make this mistake: Often, people will mistakenly believe that the insurance policy should cover the real estate market value of your home. As the real estate market fluctuates, you could be at risk for being over-insured or under-insured.  If a loss were to occur when the market was up, you may not have enough coverage for repair costs. This is because the real estate market value depends on your land as well.

Homeowners insurance is protection for the actual structure on the land, not the land itself. One of the most important things to know about purchasing home insurance is this: Insure your home with sufficient coverage based on the cost to entirely rebuild the structure in the event of a loss.

How to find out the cost to rebuild your home: Contact your local homebuilders association and ask what the average square-foot construction costs are for the specific area you live in. Then, multiply the square footage of your home by the cost per square foot. Base your insurance coverage on this number.

Most reputable insurance companies have a cost estimator calculator to assist with the process as well.

However, it’s important to keep in mind that construction costs will also fluctuate. For this reason, it’s essential to check your coverage at renewal to ensure it is sufficient. Also, if you renovate your home or add additions then you need to double-check your insurance policy limits.

Another way to save money on your policy is to check with your independent insurance agent to see if you are eligible for any discounts. For example, some insurance companies will give you a discount for having security devices in your home. Read more about home insurance discounts Here!

By: KayLynn P.

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