You’ve owned your home for a while now and you’ve remodeled, put on an addition, or maybe you’ve even purchased a beautiful She-Shed. On top of that, you’ve had the same reliable homeowners’ insurance since you purchased your home – you’re all set! Or so you think. While yes, you are insured, it’s a harsh reality many Americans face – they’re under-insured. What could it possibly mean to be under-insured?
We sat down with Beverly Bennett, API, AIS, one of our expert Personal Lines Client Service Agent’s to talk more about what it means to be under-insured and what risks follow:
Q: What does it mean to be under-insured?
Beverly: Being under-insured happens when something is insured for less than its true value. This is a common problem we see, especially with Homeowner’s Insurance. For example, if you’ve owned your home for a while but you’ve added on, bought a She-Shed or have done anything to increase your home’s value, but you’re still under your original policy limits and coverages – your home may be under-insured.
Q: What risks do I face being under-insured?
Beverly: There are several risks you’ll face if under-insured. First and foremost, all insurance policies have limits on coverage and if the cost of replacing or repairing your covered property is more than your coverage limit, you’ll be stuck paying out of pocket for the difference. If you own a home, this could put you at risk of being unable to rebuild the same value of home. Another risk faced if under-insured is that in many cases, policies carry coinsurance requirements and if they aren’t met, it can leave you with little to no coverage at all in your time of need.
How can you avoid being under-insured?
Beverly: The best way to avoid being under-insured is to review your insurance policies periodically and keep them up-to-date with any and all property changes in your home, business or automobiles.
To make sure you don’t get blindsided by being under-insured, contact Allegheny Insurance Services today to schedule a free insurance review.