Is your home underinsured?

Here’s a scary statistic for you.

Two-thirds of the homes in America are underinsured.

That’s terrifying, right? An underinsured home means putting one of the  investments of your life at risk. If you are underinsured, you will not have enough coverage to be back where you were financially before a loss.

From the same survey, a fact says that 50% of Americans do not understand basic home insurance terms. This may just have something to do with why so many Americans are underinsured–their lack of knowledge.

If you’re working with an honest, reputable insurance agent, they will try to get you the best policy that fits your needs. They will neither overinsure, nor underinsure you. However, while talking to an agent, some people just roll their eyes and assume the agent is just trying to “get more money out of them.” The reality, however, is that a good agent wants you to be adequately protected through your insurance should you need to file a claim.

Other times, people are just shopping based on price, not coverage. Searching for the lowest price does not mean the best coverage. Having better coverage saves you money in the long run. Keep this in mind the next time you are shopping for home insurance.

Another reason people end up being underinsured is by keeping the same policy for years. Certain things could change the value of your home, such as making major home improvements. After home improvements, the value of your home goes up, and your previous coverage is likely no longer sufficient. It’s crucial that you review your policy limits annually: Contact your agent at renewal to ask for a policy review.

The coverage limits needed for your home are based on replacement costs, not on the real estate value of your home. So, if the market value of your home goes down, this doesn’t mean you need less coverage. Your home will still cost the same amount of money to replace or more.

It may seem like a chore to discuss your insurance with your agent. It’s actually very important–insurance is financial protection. The protection insurance provides in a loss will save you from a financial rut, or worse, bankruptcy.

Purchasing your insurance policy is much more than searching for a cheap price–it’s searching for the best possible coverage at the lowest price you can get.

Insurance agents that truly care about their clients will not sell you any less coverage than you need. Be hesitant to purchase from a company who does not ask specific questions regarding your assets, or a company willing to sell you the bare minimum policy when you’ve got a lot to lose.

Start caring about your insurance. To learn more about important insurance terms, visit our blog page. Almost every Monday, there is a new, informational blog post about a different insurance term. Get informed, get proper coverage, and feel secure.

The survey mentioned above was conducted by J.D. Power and Associates in 2010.

By: KayLynn P.


Do you have questions about your insurance? Find an insurance agent near you with our Agent Finder

Buzz Your
Insurance Agent

Search for a local agent with our agent finder map.

Agent Finder

Search All Blogs

Search
Generic filters
Exact matches only
Search in title
Search in content
Search in excerpt

Buzz Your
Insurance Agent

Search for a local agent with our agent finder map.

Agent Finder

Want to learn more about
our blog writer?

Read more about KayLynn's background.

Search All Blogs

Search
Generic filters
Exact matches only
Search in title
Search in content
Search in excerpt

Why Life Insurance Should Be a Fundamental Part of Your Financial Plan

How Are You Protecting Your Money Machine?

What is Decreasing Term Life Insurance?

Is Decreasing term Insurance Right For You? Would You Know?

Three Ways Life Insurance May Help Pay For College

How Life Insurance Can Play a Role in the Education of Your Child

Life Insurance as a Gift

Who Do You Know that Can Benefit?

What it Takes to Qualify as a Beneficiary

Do you have the right person as the beneficiary on your life insurance policy? Here’s who you should consider and when you may want to consider a change.

Unique Benefits of Life Insurance You May Not Be Aware Of

There’s More to Life Insurance Than You May Realize

What You May Need to Know About Filing a Life Insurance Claim

Filing a life insurance claim can be a relatively smooth, hassle-free process when you know the steps to take. Learn more in our latest blog.

When Should I get Life Insurance on My Child?

Reasons to Get Life Insurance on Your Child ASAP.

Beyond Life Insurance: Other Death Benefits for Which You May Qualify

There May Be Multiple Resources for Benefits Upon the Death of a Loved One

Situations When Term Life Insurance May Be the Best Solution

Term Insurance is a Flexible and Affordable Choice

Leave a Comment