A Time to Reevaluate Your Homeowner’s Policy
National Home Ownership Month is recognized each June. It is an occasion when people across the country are encouraged to appreciate the many benefits of homeownership and to reflect upon the positive impact that homeownership has on individual households, neighborhoods, communities, and the nation.
The theme for 2019 is ‘Celebrating the homeowner heroes of today, tomorrow, beyond!’ As Home Ownership Matters, a national group committed to protecting the dream of homeownership states on their website, “We’re recognizing the heroes that make homeownership thrive while building strong communities, creating generational wealth for families, and boosting our economy. Join us all month long as we promote the American Dream of homeownership and recognize the people, policies, and programs that help protect homeownership now and into the future.”
Inarguably, one of the key components of that ongoing protection that they allude to is the homeowner’s insurance designed to safeguard homeowners against significant financial losses from damage to both property and belongings. And since June is officially Home Ownership Month, at Bosworth and Associates Insurance, we believe there’s no better time for homeowners to reevaluate the insurance policies and coverages upon which they rely for this protection and for the peace of mind they can and should provide.
A Time to Reevaluate Your Homeowner’s Policy
Most experts recommend that policyholders reevaluate their homeowner’s insurance coverage at least once a year to make sure that all policy provisions still meet the homeowner’s current needs. And it’s not uncommon for those needs to change unnoticed over time. Any remodeling or expansion, or just the normal wear and tear that all houses experience can change the home’s value, as can any up or down variations in the appraised real estate values in your area. Neglecting this reevaluation process can either leave a homeowner under-insured or paying too much for unneeded or excess coverage. Certain additions such as a home security system often qualify for discounts while other improvements such as adding a swimming pool might necessitate additional liability coverage. Just the general upward trend of inflation will raise the value of all of your property along with the replacement cost in the event of a loss. Check with your insurance agent to learn how often a policy adjustment is allowed. Failing to make necessary coverage changes can leave the homeowner paying a higher than necessary premium for protection that does not reflect current circumstances for another year.
Types of Coverage
The most basic coverage is for the dwelling – the actual structure of the homeowner’s house along with any additional structures such as decks or a garage that are directly attached to it. It is common for homeowner’s insurance to also cover other structures on the same property as the covered dwelling but that are not actually attached to the house such as storage sheds, fences, or a detached garage. A typical homeowner’s policy will likely also provide protection for some or most personal property customarily kept within the home. This might include furniture, clothing, and electronics. Items such as jewelry, firearms, art, and cash above preset limits can usually be covered for an additional charge. Another category of protection is liability coverage, which protects the policyholder from costs associated with injuries to others while on the premises. All of these overage types are generally subject to both specified limits and deductibles that must be met before claims are paid.
Homeowner’s Insurance vs. Renters Insurance
While renter’s insurance and homeowner’s insurance are both designed to protect property and safeguard the policyholder against incurring an extreme and unexpected financial loss, actual home insurance can protect against a good deal more. Whereas a homeowner’s policy covers the actual structure of the home along with any additional structures on the property, a renter’s insurance policy usually only protects against loss to belongings and any possible liability claims that might arise. Despite these differences in coverage, both renter’s insurance and homeowner’s insurance are essential components of an overall individual or family financial strategy and can offer both homeowners and renters the security and peace of mind of knowing that they will be protected to some extent from the financial impact of an unexpected disaster or loss.
How Much Do You Need?
It is well known that homeowner’s insurance in Texas costs much more than it does in most of the rest of the country. For this reason, it’s important to make sure you aren’t paying for more than you need. How much homeowner’s insurance coverage is needed should be based on the amount of risk you are exposed to, how much would it cost to replace your home and all of your belongings, and how likely you are to incur liability. A house in a flood-prone area will need additional coverage to protect against the risk of flooding. A home with a backyard pool should have additional liability coverage. An older home or even a newer home in an area with rapidly rising real estate values may cost much more to replace than its original purchase price.
With recent near-record April and May rains causing flooding in Texas and across the country, many folks are finding their financial stability threatened by an unexpected combination of water damage to home and water damage to personal property, and are unpleasantly surprised to find that they are lacking the protection that adequate flood insurance could provide. With multiple news stories and footage of high water and homes underwater, these images highlight the need for flood insurance. Now might be a great time to evaluate your flood insurance policy needs.
While having flood insurance is not a legal requirement in high flood risk areas, it can provide an additional layer of comforting security to you and to your family. Since it is considered a separate policy from a standard homeowner’s policy, flood insurance will add to your overall total insurance cost, yet can save you from a major financial hardship. To find out if your home’s location is in a high-risk flood area, visit www.floodsmart.gov.
In conclusion, a reevaluation of your current homeowner’s policy should be an annual habit, or even a more frequent task whenever situational changes merit a revision in coverage. And regardless of whether you consider climate change to be a natural warming cycle, a man-made disaster in progress, or some combination of the two, there is no denying the recent changes in weather patterns along with an obvious increase in resulting natural disasters such as forest fires, hurricanes, tornados, and floods.
In such uncertain times, there can be little doubt that a trusted family-owned and local, personal and commercial insurance agency like Bosworth and Associates in Tyler, Texas, can be an invaluable partner in assessing all of your particular insurance needs. Knowledgeable and experienced agents like those at Bosworth Insurance can assist in the selection and in the application for all types of insurance, making sure in the process that you fully understand each policy’s coverage, allowing you to rest assured and that there will be no surprises when the need to file a claim does arise.