Are You Properly Insured?

With the recent Sonoma and Napa fires in our mind, it might be a good time to look at your property insurance. Many homeowners purchase a policy once and rarely revisit it. Full home loss claims are not common, so consumers do not gain a lot of experience shopping for this type of insurance. Moreover, there are so many variations in policy types, which can create consumer confusion. A big question you need to ask is, do you have enough insurance? About 60 percent of all U.S. homes are underinsured by an average of 20 percent, according to CoreLogic, a company based in Irvine, Calif., that provides data to most major home insurers. Have you remodeled your home since you purchased it? Have you made additions to the property?   Additions and remodels add value that may not be covered if you purchased your policy many years prior to the work being done.  Also, the value of your house and more importantly the labor/material costs for replacement probably have changed since your purchased the policy.

Do you have a shopping habit or hobbies that includes jewelry, art, high end sports equipment, or lots of technology? These items might exceed the limits in the standard policy or may not be covered at all, but you can always purchase additional coverage to cover them. Many people are surprised to see how much it would cost to replace a house full of their stuff. It is important to take an inventory of your possessions on a regular basis to be sure that your policy covers your favorite things. Your insurer probably has a spreadsheet for you to use to inventory your possessions. Walking through your house with a video recorder is a good way to visibly remembering more than what you might write down.

Do your research. There are many good insurance buying guides on the internet.Here is a primer on insurance policies to get the basics down. Consumer Reports also has many good pages on this topic. You should check to see how your insurer is ranked. There are many sites that offer reviews of providers, check out this one or this one.

Insurance is not a topic that is often top of mind until you need it, but you don't want to be caught unawares when the need arises.  Take a bit of time before the holidays to ensure you are properly covered.