Home Insurance, Disaster Protection & Annual Reviews

The fires in Sonoma and Napa Counties are a sad reminder of how quickly disaster can strike. If you’re a homeowner and haven’t looked at your insurance policy lately, now is the time. It’s time to get reacquainted with what’s covered, what’s not, and how to balance the cost and benefits.

Regular Review

Hopefully, you have a great relationship with your insurance agent. You should feel comfortable asking questions and doing “what if” scenarios. If not, it’s time to shop for a new agent.

While an annual review may not be necessary, plan on an in-person meeting with your agent at least once every three years. Typically things change and your policies should keep pace with your life. You’re protecting your home and your family. Ask your agent to send you a reminder when it’s time or put it on your calendar. It’s that important.

Not Enough Coverage

According to a Consumer Reports article, the homes impacted by the California wildfires were uninsured by $50,000 on average. As you work with your insurance agent, discuss the difference between market value (e.g., land and structure) and replacement costs (e.g., construction). For example, rising construction costs can outpace insurance reimbursement.

If you’ve recently remodeled a kitchen or upgraded items such as flooring, make sure your insurance policy reflects it. Also, ask about living expenses. Rebuilding a home in Silicon Valley can take longer than the 9-12 months typically paid.

Too Much for Too Little

There’s a delicate balance between deductible amounts and insurance coverage. Consider your monthly budget constraints and weigh it against how much of a deductible you can afford. If you’re willing and able to raise the deductible, there may be considerable savings. Some insurance companies charge more for monthly payments versus semi-annual payments. Again, this is a personal decision that hinges on a workable budget you can comfortably stick to.

Feel like your financial life is in disarray? Need help in paying your bills or creating a workable spending plan? Contact me for a complimentary 30-minute consultation.

Photo credit: Ada Be, Personal Creations

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