Do you know that nearly two-thirds of those with home insurance may be over-paying or inadequately insured should a disaster strike? Unanticipated events like storms, burst pipes, mold, or septic emergencies leave people realizing their insurance policies didn’t cover as much as they expected. Having the proper policies in place is crucial should a bad situation arise.
What Kinds of Policies Are There?
- There are 9 different forms or insurance policies. The most common type of policy is an HO-3 form which offers broad coverage and is generally affordable.
- For more coverage there is a more comprehensive form, HO-5, that will protect you in the event of other perils not covered on your other policies.
- If you live in a condo, mobile home, older home, or as a tenant (typically rented properties) you will want to purchase policies specific to these living situations.
- For more details about policies read our previous blog post, “Getting To Know Your Insurance Policy.”
What Am I Most At Risk For? What Policy Is Right For Me?
- Be aware of perils your policy does not cover and consider purchasing additional coverage. Some perils can be covered by adding an endorsement, for others you may have to purchase an additional policy to cover a specific peril or item of property.
- Reasons you may want extra coverage are floods, earthquakes, wind & hail damage (in some areas), mold, sewage systems, and other plumbing or drain systems.
- Most insurance policies do not cover earthquake or flood damage. If you live in a high-risk area you may need extra coverage. The government has programs to aide in these situations. Visit floodsmart.gov to find out your flood risk and to find plans.
- Protection of your possessions is another often overlooked area. Your standard policy may be limited so extra coverage for anything of personal value or worth may be worth adding.
- Talking with your insurance agent and doing an overall assessment of your possible risks and needs is the best way to get you adequately covered.
How Often Should I Review My Policy?
- Life is constantly changing, and it is important that you keep your insurance coverage up to date with your current needs.
- The coverage you needed in your first home or apartment may be different that the coverage you need twenty years down the road if you are in a larger home, with several cars, or a valuable collection.
- It is recommended that you have a personal insurance audit every few years to be sure your policies are in line with your assets, living situation, and lifestyle.
You want to know your policy and have adequate insurance when that disaster strikes. An extensive review with your insurance agent is the best way to have your coverage needs met properly. Prepare now. Get to know your policy, meet with your agent, and make needed changes so you can rest easy knowing you are ready. You may not be able to prevent disaster but, you can be prepared to make sure you are protected.
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