subject: The Truth About Homeowners Insurance Cover [print this page] The Truth About Homeowners Insurance Cover
Is Your Homeowners' Coverage a Mystery to You?
When looking through your homeowners' insurance policy, you're not alone in thinking it is a difficult subject to understand. There is a high number of Canadian homeowners, backed up by the Harris Interactive for Travelers Insurance, who are unclear of their coverage in full detail. Too many policy holders are risking financial disaster by having under insured or undervalued policies.
During the study over 1,300 homeowners were asked to define the exact coverage of their policy as well as seeing who, if any, reviewed their on a regular basis. The study results showed that 44% of the participants had not reviewed their policy in the last year and a small proportion of them had not reviewed it in the last 10 years or more.
Here are the further results from the Travelers In-Sync Homeowners' Insurance Study :
Almost 27% of the homeowners who were questioned were unclear if their policy would cover the cost of a full home rebuild.
36% were unsure of their policy covering hurricane damage.
Forty two percent were unsure of their policy covering damage costs in the even of an earthquake.
26% were not sure if their policy would cover flood damage.
Thirty seven percent didn't know if lengthy hotel stays would be covered due to a damaged house.
There are so many factors which can affect the home insurance a policy holder needs. As the study showed, it is vitally important for the policy to be reviewed regularly to ensure you are fully covered. Here is a check list to use when reviewing your home insurance:
Have you recently performed amendments and additions to your house?
If you have had building work or improved the value of your home, it is highly likely you are under-insured.
Since your policy appraisal has the inflation rate increased?
During times of poor weather and damage occurs, this can have an affect on the cost of labor and building materials due to a change in inflation, therefore it is important to review and update your insurance coverage frequently.
Have building costs increased in your area?
Is there sufficient supply of labor and materials in your area? If you home needs repairing have the materials which are needed risen in price? Keeping your policy up to date and regularly reviewing it will ensure the insurer has the correct amount of money for any repairs.
Understanding what affects the replacement costs for your home and keeping the insurer up to date is important. Your home may be higher or lower than market value if it were to need replacing. Hard to find or expensive building materials can affect the policy and having the correct coverage will stop you being under-insured.
By communicating with your insurance agent about your home insurance regularly will keep the policy relevant and perfectly valued in the event of you needing repairs or a replacement. This will negate the need of any surprises in the event of any damage.
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