How to Avoid Underinsuring Your Home

As a responsible homeowner, you know the importance of home insurance. These policies can make all the difference in the aftermath of accidents or other unexpected situations, potentially limiting out-of-pocket expenses and shielding you from significant financial losses. However, home insurance can also be complex, and it’s necessary to be diligent when composing and revisiting your policy to ensure your coverage is sufficient.

Key Considerations Regarding Home Insurance

Whether you’re putting together your first home insurance policy or revisiting your coverage, there are several common pitfalls to avoid being underinsured. Consider the following:

• Requirements—Although there are typically no legal requirements regarding home insurance, if you’ve purchased your residence using a mortgage, your lender will likely mandate coverage. Additionally, other requirements may apply to homeowners. For example, if you’ve previously received aid from the Federal Emergency Management Agency for flood-related losses, you may need to carry coverage to be eligible for future funds.

• Coverage limits—Home insurance policies typically include a maximum limit that they can pay out for covered losses. If you reach this limit, you may need to cover remaining costs out of pocket, which could have significant ramifications for your financial situation and may even keep you from adequately repairing or replacing your property. Regularly reassess your coverage limits, as fluctuating property values, renovations and other life changes may impact your needs.

• Excluded perils—In many cases, specific incidents may be expressly excluded from your home insurance policy. For instance, most standard home insurance does not include coverage for floods or earthquakes. As such, if you live in areas at risk of such incidents, you should strongly consider additional coverage to ensure sufficient financial protection.

We’re Here to Help

At Paramount Insurance & Multiservice LLC, our dedicated team is fully equipped with the knowledge and experience needed to help you secure and maintain the right coverage for your home. Visit our website or call 404-902-5615 to learn more about your options or to compare personalized home insurance quotes.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.