Is You Home Under-Insured?

Regrettably a lot of homeowners insurance policy holders are not carrying sufficient coverage in the event of a major problem. Surveys carried out regularly vary in their assessment of the problem but almost all agree that about two-thirds of all homes are under-insured and that, on average, these homes are under-insured by around about 20 percent.

Usually of course you do not find out that you have insufficient insurance until disaster strikes and then it is already too late. In states such as California, where wildfires are commonly seen, many families were astounded following the latest round of fires to learn that there was not enough money available when it came time to rebuild their homes.

The problem is not only concerned with the total sum which you are insured for but also involves the sort of coverage you have. For example, you might be astonished to learn that numerous Katrina victims said that they had been told by their insurance agents that there was no need for them to have flood insurance.

Why then are a lot of people under-insured? After all, surely it must in the interest of insurance agents, who are after all the experts in this field, to ensure that their customers are fully covered, not merely to safeguard their reputations but also because they are generally paid a share of each policy the sell.

Unfortunately, the answer is simple. All too many insurance agents work on volume and so do not bother to take the time to ensure that you have the policy that you need but merely sell you whichever plan they can as quickly as possible so that they can move on to their next customer. Additionally, the insurance market these days is incredibly competitive and so many agents would rather persuade you to purchase a policy at a lower cost premium and with less cover than you require than chance you purchasing from someone else.

As with most things in life you receive what you pay for with home insurance. Of course, you can lower your costs by going for a lower sum assured or by excluding some forms of cover from your plan but is it really sensible to do so?

Our homes are by and large the single most expensive purchase we are going to make and our lives, together with the lives of our family, can quite literally be turned upside down if we cannot replace our home and personal belongings when disaster strikes. And, if you believe it could not possible happen to you, just cast your mind back to the countless terrible stories you have heard not so long ago from the victims of hurricane Katrina and those people involved in the California fires.