Whether you are looking at moving into your first condo or your own custom build, there are a number of factors to consider. The reality is, no matter what type of residence you are looking for, purchasing a house is one of the most impactful decisions you will make in life.  This is your dream and this house will eventually become your home. Countless memories will be made in this space and it will contain some of your most precious belongings. That is why most people choose to protect their home with Homeowner’s Insurance. What many people do not realize is that not all Homeowner’s polices are made equal. Cutting corners when getting this coverage can leave some of the most common losses homeowner’s experience uncovered. Unfortunately, many do not realize what their policy does not cover until they need to make a claim. It is extremely frustrating to have insurance in place and, in your time of greatest need, be left to bear the weight of the entire loss.

Our goal today is to discuss the simple things you can be looking for or asking your agent about to make sure you aren’t paying for incomplete insurance coverage. Most policies are broken into three parts: Property, Liability, and Other Coverages. Each section has limits which apply to different scenarios, depending on the loss. These limits do not overlap so if a loss occurs in one section, limits from another section will not be applied.

First and foremost, it is immensely important to examine your policy every few years. This is especially true in the Property section of the policy. As the value of your home increases and construction costs rise, it may be necessary to increase this limit. If you owned a home for even a few years, you may have seen that there has been a substantial growth in the value of your home. If this limit is not increased in accordance with the value of your home, you may not be able to rebuild the same home if a total loss occurs. Similarly, if you make renovations to your home, this will increase the value of your home and should be reflected in your Property coverage. A subsection of the Property coverage is Other Structures. This would include a shed, deck, or fence. If you make updates or additions to your property, minimum limits may not cover these structures to completion. Another subsection is Personal Property. All that furniture you are buying for the home and the brand-new TV should be added into this limit. Many new Homeowner’s will take a guess one what it would cost to replace all their belongings within the home.  We always suggest to think through your home, room by room. Most will find that, to replace every piece of furniture, picture frame, and knick-knack would cost much more than their initial estimate might suggest. Their may also be sub-limits within this section, meaning that if you own high value items like jewelry, guns or keep cash in your home, make sure you will not be stopped short of the actual value of what you own.

The second part of a Homeowner’s policy is the Liability section. Liability coverage covers instances where you are at fault. This may be because your dog bites a stranger on a walk or a guest at your 4th of July party trips on a cord you left exposed. Where many Homeowner’s find themselves in trouble is that their liability limits are not high enough. If you were to get into a lawsuit, minimum limits will likely run out much quicker than you would imagine. If limits run out in instances like these, your personal assets, future wages, and more might be at stake. If you want to carry less liability insurance on your Homeowner’s policy, having an Umbrella policy adds an extra layer of protection should your initial limits run out. However, it is usually more affordable to have the correct limits for liability within your Homeowner’s policy.

Additional Coverages is the last section of your policy. These may seem like “optional” coverages, but a lack of coverage in these areas can often be some of the most frustrating to realize in the case of a claim. These coverages fill in the gaps the general coverages do not. Make sure your policy includes Loss of Use, Water Backup and Sup Pump Overflow, Fire Department Service Charge, and Debris Removal. These coverages will only cost a few dollars a month and may save you thousands of dollars. Additionally, keep an eye on your deductibles and make sure you can meet these deductibles if something does happen. Cost per month is often lower to have a high deductible, but this can create problems if there is a loss and you are unable to afford the initial deductibles. It is often better to pay slightly more per month and have a lower deductible you can truly afford in the instance of a loss.

Insurance can be seen as a “necessary evil” or even a nuisance to have. Most will pay their insurance, year after year, and never have a claim. But fixing a roof or a small basement flood can cost tens of thousands of dollars and make those years of insurance payments well worth their cost. More so, in the rare case a complete disaster occurs, Homeowner’s insurance steps in to restore the place where you have created memories, built a family, and keep your most prized material possessions. If you are going to pay for this protection every month, you should, at the very least, make sure you are protected in all the right ways.

If you have further questions about your current insurance, or feel that it may need to be updated, feel free to reach out to Aaron Beckman at Madison Insurance Group. Madison is a family-owned, independent agency here in Denver and Aaron believes in getting the right coverage for the right price. His contact information is listed below:

Aaron Beckman 

Madison Insurance Group

Phone: 720-279-3091

Cell: 303-720-1986