Is it time to renew your home insurance? Now is the perfect time to review your policy to make sure that you’re prepared for the worst.
A fire can take an incredible mental and emotional toll. As much as we don’t think it will happen to us, it also pays to be prepared, just in case.
The financial burden of house fires could be much worse without home fire insurance claims to cover the costs. When you file a claim, you don’t have to do it alone. An insurance lawyer or an insurance public adjuster can help you negotiate with your insurance company so that you get what’s fair.
Keis George is a law firms that offers subrogation fire claims that can be quite useful if your home has ever had a fire incident or you taking precautions, read more about it.
That said, they can’t help you get coverage you don’t have. Being fire-prepared starts with your insurance policy. Asking yourself these three questions will help you get the policy you need to cover the costs of a catastrophe.
1. Can You Afford Your Deductibles?
Many insurance companies offer lower premiums if you accept a higher deductible, but this can quickly become a problem if your deductibles are too high.
When you make an insurance claim, the deductible is the amount you have to pay before the insurance covers anything. If you don’t have emergency savings equal to all of the deductibles you might have to pay in a total fire loss, they’re too high.
Now is either the time to bolster your emergency savings fund or reduce that deductible in exchange for higher premiums.
2. Do You Have Replacement Cost Coverage?
Most policies will have one of two types of coverage: Actual Cash Value and Replacement Cost coverage. These two will change how much the insurance company pays out for lost belongings or repairs.
Actual Cash Value coverage can lead to a lower settlement because it compensates you for the depreciated value of belongings like a broken recliner or construction materials. Replacement Cost coverage, on the other hand, will meet the cost to purchase those same belongings or materials at today’s cost.
You may not need Replacement Cost if the premiums are too high but be prepared with the knowledge that you may not be able to replace everything you owned before the fire without it.
3. Do Your Limits Match Today’s Costs?
Construction costs have risen considerably in the past couple of years. From lumber shortages to the rising cost of commodities like copper, not to mention delivery delays, the cost of rebuilding your home may be much higher than the amount your insurance policy was designed to cover.
Policies tend to have inflation guards that increase your coverage over time, but if construction costs have outpaced inflation by a significant margin, they may not be sufficient.
Another area of concern is your Additional Living Expenses limits. Additional Living Expenses coverage should pay for costs like renting an apartment or a house, increased transportation costs due to a longer drive to work or getting the kids to school, storage costs because it is a home and not some dorn room, and more.
High gas prices have recently become a concern, and they can quickly add to your increased expenses. But perhaps even more important is how much money your ALE coverage provides for renting another place to live.
The cost of rent has skyrocketed in many places, to the point that there are now bidding wars for single-family rentals where prospective tenants offer more than the asking rent. The lack of housing across North America means you may get an unpleasant surprise when you try to find somewhere for your family to live while your home is being repaired.
When you renew your home insurance, it is the perfect time to review your limits and make sure you have the coverage you will actually need.