How good is your insurance coverage?
Many people think they have adequate insurance … And a disaster is not the best time to discover your insurance wasn’t enough! Unfortunately, this is an all-too-common occurrence. The good news is that it’s completely avoidable.
How can you know if your insurance choices are right for your situation?
Begin by pulling up your policies and answering these questions.
1) Is your homeowners policy based on the value of the house — or the cost to rebuild?
Real estate prices can fluctuate wildly. It may seem like a good idea to reduce your insurance costs when the housing market is down. Your home has less value, so why not save some money?
This seems reasonable on the surface. But it can leave you vulnerable should you need to file a claim. If your home is destroyed in a natural disaster, the cost of rebuilding it would be driven up by the fact that all your neighbors would be rushing to buy materials and hire contractors.
Which is why experts recommend that homeowners insurance should cover the cost of rebuilding your home, plus replacing your belongings.
If you are looking to lower your policy premium, explore your options for deductibles. A higher deductible usually allows you to save significantly on premiums. Just be sure to understand the conditions around the deductible you choose, like when you’d have to pay it — and how much.
2) Don’t choose your policy based on price alone.
Insurance costs can put a strain on your monthly budget. It’s tempting to choose the cheapest price available.
But choosing a policy based on price alone can be a mistake.
- Are you comparing policies that provide similar coverage? It’s critical to compare similar coverage limits and conditions.
- If you ever need to file a claim, how quickly will your insurance company provide the funds? How much legwork will YOU have to do?
- Is the company financially stable enough to cover your claims?
Before you purchase a policy, check its ratings. A.M Best and Moody’s are good places to start.
When it comes to home insurance, at MDL Financial Group, we choose to work with our trusted partners at Rowat Insurance, they have decades of experience and grade A quality service.
3) Know what’s covered.
It’s critical to understand your insurance policies. Otherwise, you could end up without proper coverage.
For example, most homeowner’s insurance policies don’t include coverage for flooding. If you live in or near a flood zone, that could be financially devastating. Earthquake is another peril that isn’t covered by a typical homeowners insurance policy.
If needed, shop for additional policies to cover those gaps.
Insurance is there to protect you and your assets. Make sure you have adequate coverage to provide the level of protection you need.
If you have questions about your insurance coverage, contact us at MDL Financial Group. We can give you some solid guidelines to follow — and make you aware of any gaps in your insurance.