Stay on Top of Your Homeowners Insurance

Posted by Kelly Smith Mar 15, 2009

I got an interesting letter yesterday from State Farm. I use them for both my car and my homeowners insurance. They've been busy around here this year because of hurricane Ike. Generally, we get about twenty years between really bad storms, so maybe we're good for a while.

Knock wood.

Anyhow, the gist of this latest correspondence was about the importance of keeping the dollar figure on your homeowners insurance policy up to date. This is your responsibility, and yours alone. Trouble is, most folks don't think about it. I know I don't.

For one thing, my payment is lumped into my monthly home mortgage payment, along with my school, city, and property tax escrow. So, it's all but invisible. See no evil, hear no evil.

We all make some kind of home improvements at some point. Have you pulled up the carpet and laid a laminate floor? The cost of your home replacement just went up, and that's what your insurance payout should cover. Not what your friendly taxing authority tells you what your home value is.

There's a vested interest if ever there was one! Not enough money in the municipal coffers this year? Just tell Joe the value of his home just went up. Again.

But suppose you haven't made any home improvements in the past few years. Should you still review and revise your policy? Absolutely! Remember, it's all about replacement cost. The price of labor for the building trades has gone up.

Unless, of course, the local building contractors in your area indulge in the loathsome practice of hiring illegal aliens.

There are some things about homeowner and renters insurance that people mistakenly assume and don't find out until it's too late. Things like flood coverage. In most cases, it's not built into the basic policy. It's not expensive, but also not automatic. Seems like it would be, but nay. Forewarned is forearmed.