Nobody likes to consider the ramifications of a worst case scenario, least of all the financial consequence. However, did you ever wonder what would happen if a major storm (of the likes were recently experienced in Dallas, TX) struck you or a loved one?
Each year when our renewal notices come through the mail for our home contents insurance and/or home buildings insurance, most of us automatically sign the form and send it back to the insurance company – after all, we already know how much the premiums are going to be. Big financial mistake, and here we are..
Each year when our renewal notices come through the mail for our home contents insurance and/or home buildings insurance, most of us automatically sign the form and send it back to the insurance company – after all, we already know how much the premiums are going to be. Big financial mistake, and here are 3 reasons why:
Did You Buy Anything New In The Last Year?
If you bought anything new in the last year, say a new television or video recorder, then the value of this new purchase will not be included in the renewal notice you just sent off to the insurance company. Likewise, if you sold anything of value over the last year, and have not informed the insurance company, then you are paying home contents insurance for something you no longer own. Either way, you’re not paying the right amount of insurance premiums. (Note: More specific items such a jewelry, fine arts, and firearms are items often neglected when discussing exact coverage needs.)
Did The Costs Stay Static?
If you have home contents coverage, then you are insuring your personal property for the replacement value of buying the same things new. On the other hand, part of your home buildings insurance should cover the expected cost of labor and materials. Now ask yourself, would the cost of replacing the picture hanging in your living room be the same today as it was last year? If the answer is that it would cost you more, tough luck, you’ll only get paid out what you said the cost of replacing it would be! The same can be said of your friendly builder, would he charge you the same for an hour of his time and for his materials today as he would have done last year? If the answer here is no, then you should be expecting to pay him the difference.
Did The Value Of Your Home Stay The Same?
Similar to the above, with your home building’s insurance you need to be asking yourself whether or not the value of your home stayed the same this year as it was last year. You need to be asking yourself this question even if you didn’t do any work to the house – such as building an extension – that would naturally automatically add value to your home. (Why? – With inflation costs (costs associated with everything from labor, equipment, and materials to help rebuild your home), the underlying protection need, your home, fluctuates with these changes as well (i.e. adding value to your home).
Keep in mind that time stands still for no one. As such, you need to read your home contents insurance and/or home buildings insurance renewal notices very carefully to make sure that they reflect, as accurately as possible, your life today and not your life of yester-year.
Are you ready to talk with us about your specific coverage needs today? Nick Purvis Agency is here ready to dive deeper into your specific situation, coverage needs, and concerns. Regardless if you were to ever start a policy with us or not, we value the discussion to help you feel confident about the coverage that you have (or might seriously need) — whether it is with us, or elsewhere. Please don’t hesitate to contact us with all of your questions.