You may have bought your home some time ago and no longer think about your policy, but it is common for changes to take place for a homeowner that create a situation where you have become under insured. This is especially common with young couples who have started a family or have growing families. The following are a few situations that can create a problem with being under insured.
Improvements have been made to your property
With most policies, you don’t need to be concerned about the value of your home going up in price, and thus creating a situation of being under insured. In the case of a total loss of your home, your insurance company will base the claim on the replacement cost. It doesn’t matter what the home was worth in the market. However, this replacement cost is based upon the house that you first purchased. Any physical improvements you have made, you need to add to your policy. If you have added a new room, a swimming pool, or even a brick barbecue in your backyard, all of these things need to be added to your policy. Naturally, your premiums will go up a bit, but you will be covered in the case of a loss. Your insurance will pay for the replacement cost of your house and any additions to it.
You have children
You may have been childless when you first bought the house, but now, you and your spouse have started a family. As soon as children are in the home, there are new liability issues. Perhaps not in the beginning, when the child is still young, but as they grow older, they will have friends over to the house. You will need to make sure you have enough liability coverage to protect yourself in case a child is injured while they are at your house. The best way to determine if you have enough liability is to consult with a homeowners insurance sacramento agent.
The last thing you ever want to do with your homeowners policy is to file it away and forget about it. Always inquire and get new quotes for a policy that reflects changes to your family as well as changes to your property.