John Bendall owner of Re/Max Classic Group warns that many homeowners do don’t have as much insurance as they need.

A home is the biggest investment many people make in their lifetime, so it is no wonder that they are concerned with protecting it.  However, many people do not read through there homeowner’s insurance policies as carefully as they should and they believe that many losses are covered which in fact are not. 

 

Several of the losses that people incorrectly assumed would be covered include stolen vehicles, damage from a broken water or sewer line, mold damage, and damage from wood destroying insects.  The most common of the losses that people believed were covered, but are not, is damage from flooding.  Flood damage almost always needs to be insured by a separate flood insurance policy in order for damage to be covered. 

 

Another common mistake people make is not insuring there property for enough money.  They need to consider the actual replacement cost as opposed to the current value of the loss.  The cash value of the home and items in it includes depreciation and it may not be possible to actually replace the items for that value.  Replacement cost coverage will allow for the replacement of items at current market prices. 

 

If you have invested additionally in collections of jewelry, antiques, art, stamps, or coins you will probably want to include extra riders on your policy to protect those items as well.  Many people incorrectly believe that there policies fully cover the loss of all items in their homes, but this is often not the case.

 

While spending an evening re-reading your homeowner’s insurance policy may not be the most entertaining time you’ve ever spent, it is time well spent in the protection of your most valuable investment, your home.  If you require additional clarification you should check with your insurance agent to find out exactly what you are covered for.

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