1. Insuring a home for its real estate value rather than for the cost of rebuilding
When real estate prices go down, some homeowners may think they can reduce the amount of insurance on their home. But insurance is designed to cover the cost of rebuilding, not the sales price of the home. You should make sure that you have enough coverage to completely rebuild your home and replace your belongings—no matter what the real estate market is doing.
2. Have you acquired any new valuables such as jewelry, electronic equipment, fine art, antiques?
A standard homeowners policy offers only limited coverage for highly valuable items. If you have made purchases or received gifts that exceed these limits, you should consider supplementing your policy with an endorsement, a separate policy that provides additional insurance for your valuables and covers them for perils not included in your policy, such as accidental loss. Before purchasing a floater, the items covered must be professionally appraised. Keep receipts and add the new items to your home inventory.
3. Have you done extensive renovations on your home?
If you have made major improvements to your home, such as adding a new room, enclosing a porch or expanding a kitchen or bathroom, you risk being underinsured if you don’t report the changes to your insurance company. An increase in the value of the structure of the home may require an increase to your homeowners insurance coverage limits. Don’t overlook new structures outside of your home. If you built a gazebo, a new shed for your tools or installed a pool or hot tub, you should speak to your insurance professional. If, as part of a renovation, you purchase furniture, exercise equipment or electronics, you may need to increase the amount of insurance you have on your personal possessions. Keep receipts and add any new items to your home inventory.
4. Does your rental car coverage extend to your specific vehicle?
Frequently, we strongly advise our clients to enhance their rental car coverage due to the rising daily rates of rental cars. At times, opting for the cheaper $30 per day and $900 minimum might lead them to drive a significantly smaller car. To avoid this inconvenience, we encourage all our clients to have a minimum coverage of $40 per day. Nevertheless, if you plan to drive a Yukon XL, I would recommend considering a coverage of $50 per day. It would be unfortunate to switch from a spacious SUV to a compact Ford Focus, especially when you’re accustomed to a larger vehicle.
5. Why should I consider adding Water Backup coverage? Doesn’t my homeowners policy already cover it?
Water backup damage is typically not covered under a standard homeowners policy. To obtain coverage for water backup and sump pump overflow, you would need to add it as an optional coverage to your homeowners policy.
Water surrounds your property, whether it’s in pipes or beneath the ground. Unfortunately, water damage caused by backed-up drains or malfunctioning pumps is a common occurrence and ranks as the third most expensive insurance claim, right after fire and liability lawsuits, according to the Insurance Information Institute. Since such water damage incidents are often excluded from standard home policies, it is crucial to ensure that you have protection in the form of a water backup endorsement. Feel free to discuss with us the appropriate limits for the water backup endorsement that best suits your needs.
6. Comprehending the rationale behind our recommendation for greater coverage as opposed to the minimum requirements set by the state.
In the state of Ohio, the minimum insurance requirements dictate a maximum payout of $25,000 per person and $50,000 total per accident for bodily injuries, along with $25,000 for property damage resulting from an accident. However, at Laurie Campos Insurance, we typically recommend a coverage of 100/300/100 to our clients. This means providing $100,000 per person for bodily injuries, up to a maximum of $300,000 per accident, in addition to $100,000 for property damage. Our suggested coverage exceeds the minimum requirements by more than double.
State minimum insurance is designed to meet the bare minimum legal obligations. It may be the cheapest option available, but it often falls short in providing adequate coverage in case of an accident. We typically only offer minimum coverage if specifically requested by the insured or in situations where we aim to quickly provide coverage after a period of being uninsured.
It’s important to note that if you cause an accident and your state minimum car insurance doesn’t cover the full expenses, you will be personally responsible for paying the remaining amount out of your own pocket. If you lack sufficient funds, the other driver has the right to sue you and seek compensation from your assets or have your wages garnished. Therefore, it is crucial to have adequate insurance coverage to protect yourself financially in case of an accident.