Your home is likely your biggest asset, but is it properly protected? Inflation, renovations, and changing market conditions can leave you with a coverage gap you didn't see coming.
Being underinsured means that if disaster strikes, your payout won't cover the full cost of rebuilding or replacing your belongings. Here are 5 tell-tale signs that it's time to update your policy.
1. You Haven't Updated in 2+ Years
Construction costs have skyrocketed in recent years. If your coverage limit was set based on prices from three years ago, it likely won't be enough to rebuild your home today.
The Fix: Ask your agent for an "inflation guard" endorsement or review your dwelling coverage limits annually.
2. You've Renovated (Secretly)
Did you finish the basement, upgrade the kitchen, or add a deck? If you didn't tell your insurance company, those improvements aren't covered.
The Fix: Report all significant upgrades. Yes, your premium might go up slightly, but you'll actually be covered for the new value.
3. You Bought Expensive Stuff
Standard policies have sub-limits for categories like jewelry, art, and electronics (often just $1,500 or $2,500). If you bought a $5,000 engagement ring or a high-end camera, a standard claim won't cover it.
The Fix: "Schedule" these items separately or add a rider to your policy for full value protection.
4. You Have "Market Value" Coverage
"Market Value" is what you could sell your house for. "Replacement Cost" is what it costs to rebuild it. In many areas, rebuilding costs more than the market price of an older home. If you only have market value coverage, you could come up short.
The Fix: Always opt for "Replacement Cost" or "Guaranteed Replacement Cost" coverage.
5. You Ignore Exclusions
Most standard policies do not cover flood or earthquake damage. If you live in a risk zone and don't have a separate policy, you have zero coverage for these events.
The Fix: Check flood maps and consider adding specific flood or earthquake policies.
Don't leave it to chance.
A quick policy review can save you from financial ruin. Connect with a vetted insurance partner to check your coverage gaps today.
Find an Insurance Pro