- 1. Underinsuring your Home
Having enough coverage in place to rebuild your home in the event of a total loss is critical and often overlooked. Covering just the mortgage amount or even the current value of the home may not be enough. When real estate appreciates and inflation drives up costs of building supplies and labor, your homeowner’s coverage needs to follow. The coverage amount you started with years ago may not be sufficient now. Have your agent review your policy and run a current replacement cost estimator if need be. Remember to include premium woodwork and other high-end features.
- 2. Wind/Hail/Hurricane Deductible
Another common mistake is assuming there is one flat deductible across your policy for all perils. Often times wind, hail, or named storms will have a separate deductible from all other perils. Sometimes this is a percentage deductible calculated from your coverage amount. For instance, if you have a 2% hurricane deductible and $250,000 of coverage on your home, your deductible would be $5,000. Don’t let this come as a surprise to you. Talk to your agent to see what your deductible is and what options are available if you do not know.
- 3. Assuming Flood is Covered
A very costly error is thinking you have flood coverage through your standard homeowner’s policy. Standard homeowner’s insurance does not cover rising water. Many people have found this out the hard way. Flood insurance can be purchased separate to cover this risk. Pricing varies depending on zoning and coverage amounts. Keep in mind also that, except for a loan closing and other rare instances, there is a 30-day waiting period between the purchase date and effective date of flood insurance.
Talk to your agent today or give us a call to review your Homeowner's Insurance at 985-542-6900!