Homeowner's Policies Often Fall Short

You may not think much about homeowner’s insurance coverage until either you buy a new home or some type of damage strikes your current home. According to a survey by Consumer Reports National Research Center in 2009, most U.S. homeowner’s insurance policies fall short – and apparently, it’s often discovered just when you need them the most.

The survey found that homeowners that filed claims were more often than not greeted with delayed payments, smaller payouts, and denied claims. These depressing scenarios focus on the insurance-side responsibilities not meeting with homeowner expectation. There are also other ways in which a policy may fall short.

Not Periodically Updating The Policy

Homeowner’s insurance covers the cost of replacing your home or damage to your home in the event of a fire, storm or such. However, this coverage is based on the conditions of your home and your possessions declared at the time coverage was secured.

Over the years that have passed since you took out or last updated your policy, certain updates or improvements to your property have occurred. These updates/improvements have increased the value of the home and unless your policy is routinely updated, your policy will fall short when you need it. Just two of the many areas that affect the value of a home are construction rates and renovation costs.

Not Securing Sufficient Coverage

Some homeowner’s have policies that are very basic. These policies cover only the types of damage to a home that’s most likely not to occur such as a fire. However, depending on where you live, you may need to add certain riders to your coverage.

For example, if you live in a flood-prone area, you should consider having a rider to cover your home in the case of a flood – because based on where you live, it is likely to happen. Similarly, sewer back ups may or may not be included in your coverage and may be rider dependent.

Earthquake coverage is another area to consider.  If you live in area that is close to a major fault line, this insurance is a good idea. However, it isn’t included in basic coverage.

Should you decide against a costly but needed rider and you incur damages from that particular type of event, you will be responsible for the repair or replacement of whatever is damaged – which could possibly be your entire property.

If you haven’t had your homeowner’s policy reviewed in some time, consider it a 2013 resolution to bring your policy up-to-date this year. Call your insurance agent and set up the appointment. Should damage to your home occur this year, you’ll be so glad you had the review and made adjustments.