By Richard L. Purtz
This year is shaping up to be memorable in so many ways, including a predicted above-normal 2020 Atlantic hurricane season, according to forecasters with NOA’s Climate Prediction Center, a division of the National Weather Service.
National Insurance Awareness Day is June 28 to remind people to review their insurance policies and make sure they have the coverage you need. About two-thirds of U.S. homes are underinsured, which could result in financial hardship in the event of storm damage. A study by insurance.com in 2018 learned nearly a quarter of homeowners said they’d never even read their policy!
Now is a good time to review and make sure your homeowner’s policy is robust enough to fully repair or rebuild in the event of a claim. It’s important to understand what your insurance covers and what it doesn’t. Make sure that none of your information – such as residents of the household or pets – needs to be updated. While you are at it, it is probably a good idea to look at your other insurance policies also.
Why is it so important to update your insurance policies with new information? Insurance companies can deny coverage for a loss when there is a “material misrepresentation” by the insured when procuring the policy. These material misrepresentations can be in the form of a failure to disclose a resident relative or a new pet. This can be devastating for someone who has faithfully paid their premiums for years because it may mean you have no insurance coverage for an event that destroys your home.
You should also regularly check to see if you have enough coverage – whether it is coverage for your home, coverage for the contents within your home, bodily injury coverage for your motor vehicle, or underinsured motorist coverage for your vehicle.
Here are things to consider in reviewing your homeowner’s insurance:
- Are deductibles on your policy sustainable in the event of a claim? Will you be able to cover them if necessary?
- Have you explored all possible discounts, such as wind mitigation certification or discounts for fire or burglar alarms, new roof or upgraded heating, plumbing or electrical systems?
- How has your customer service experiences been with the company? Check online resources and ask friends and family to determine what insurers have a good reputation among policyholders. Responsive customer service will be important in the event of a claim.
- Have you had a major life change, like having a baby or starting a new job? You may need to update your insurance.
- Have you renovated or built an addition? If so, make sure your policy reflects the change in value of your home.
- In the event you need to rebuild, does your insurance policy include any extra expenses caused by meeting building codes adopted after your home was built? You may want to add building code coverage, called building law or ordinance coverage.
- Flood damage, which can come with a hurricane, is usually excluded on homeowner’s policies. Consider purchasing separate flood insurance. Visit FloodSmart.gov for information.
- If you live in a condominium, what type of insurance does your homeowners association require?
- Have you evaluated your needs by conducting a thorough home inventory of your possessions?
- Does your policy provide enough coverage for landscaping, outdoor appliances or storage sheds?
- Have you started a home-based business? You may need to change your coverage for business liability and equipment.
An annual insurance review can go a long way in protecting what is often your biggest investment. Make it part of your hurricane preparations. Our attorneys are always willing to sit down with you and review your policy at no cost, to make sure you have appropriate coverage.