How Do You Know If You Have Enough of The Right Kind of Insurance?

In October of 2007, homeowners throughout San Diego County suffered devastating losses of their homes. Multiple fires burned consecutively in all regions of the County and people helplessly watched as firefighters battled to extinguish the fires.

Almost 2 years after the fires, homeowner’s losses continue to increase. The main reason for the increase of loss is due to the widespread issue of homeowners being underinsured.

Fire survivors have learned a very important lesson. Relying upon their insurance agent or insurance company to set the limits of their policy was not a good idea. It only hurts the homeowner, without repercussion to the insurance agent or insurance company.

How can you prevent this from occurring?

There are several coverage areas that need to be considered. Some of the areas to review are:

• Replacement Cost versus Actual Cash Value
• Guaranteed Replacement Cost
• Determining the replacement cost value of your property
• Do not base the replacement cost limits on the amount of your mortgage
• Is all of your personal property correctly insured?
• Do you have extensive or expensive landscaping, trees, plants or shrubs that need to have higher limits?

Insurers claim it is the responsibility of the homeowner to determine the appropriate levels of insurance for their property. The agent or broker will not know your property and your possessions as well as you do. Accept the responsibility to properly insure your house.

If you do not purchase the appropriate amounts of coverage, the loss will be yours to suffer.