Do You Have Enough Insurance to Cover Your Home's Skyrocketing Value?

**Do you have enough insurance to cover your home's skyrocketing

value?**

Home prices are through the roof thanks to housing, labor, and materials

shortages, supply chain disruptions, inflation, higher rent prices, and

strong demand. So, it's a great time to own or sell a home. Many people

have drastically increased the value of their largest asset without

much, if any, out of pocket cost. But, before you take out a second

mortgage to travel the world or open that business, make sure your home

insurance limits are keeping up with your value.

Your home insurance policy has limits, or caps, on the amount that the

insurance carrier will pay in the event of a total loss. These limits

apply to your main structure, other non-attached structures (e.g. shed

or doghouse), and your personal property inside of the structures. For

example, if your policy has a limit of \$300,000 for your main

structure, also called "Coverage A," then that is the maximum amount you

will get if a hurricane causes a total loss to your home.

Now let's say that your home was worth \$300,000 when you bought it 3

years ago. Back then, you bought a policy with a limit of \$300,000, but

now your home is value at \$500,000. What happens if a hurricane

destroys your house tomorrow? Yeah---you're out \$200,00 to rebuild it.

How can you avoid this? Easy. Save \$200,000.

Just kidding. You need to tell your insurance agent that you want to be

sure that you are not underinsured. Some insurance policies penalize

policyholders who are underinsured by enforcing co-insurance clauses.

Coinsurance is a topic for another day, but the key concept is this: if

you're underinsured, you will pay a financial penalty if you suffer a

loss in the form of a lower settlement. Coinsurance exists so that

policyholders are not tempted to underinsure to save money on a premium,

which brings me to my next point.

You will have to pay more in premiums to raise your coverage limits. But

the amount will likely be negligible when compared to the possibility of

being stuck with the difference after a total loss.

Right now, through hurricane season (Nov. 30), Clint & Company is

offering to review insurance policies for free. Get your policy and use

the link to schedule an

appointment: https://bit.ly/3vF9dEz.