Whether you’ve owned your home or condo for years or are a first-time buyer, minimum insurance requirements do not always fully protect your most valuable asset. This can leave you exposed to unexpected losses. That’s why it’s important to carefully review what your policy covers. Ask questions about exclusions, deductibles, and optional add-ons that may be necessary based on your risk profile.
Risk knowledge is essential to successful homeownership protection
The sooner you invite your insurance agent into the home-buying conversation, the better.
Insurance is NOT a one-size-fits-all proposition. Without a clear understanding of the risks unique to your situation, you may be unlikely to customize or optimize your coverage. When you understand your risks, you can then evaluate your own risk tolerance and make informed coverage decisions.
Many homebuyers — especially first-timers — falsely, yet understandably, believe that the required level of coverage will be enough to protect their financial security. On top of that, traditional home purchasing processes and timelines typically don’t allow enough time for homeowners to develop the knowledge needed to understand insurance, like the tradeoffs of paying a little more money up front for more comprehensive policies, or options for customizable coverage.
Discussing risk earlier in the homebuying process, can help in two important ways – secure adequate coverage, and adopt and implement mitigation/protection measures.
Bare-bones coverage can equal unexpected costly losses
Homeowners should fully understand their property's exposure to hazards and how well their insurance policies cover those risks.
Basic homeowners’ coverage is often limited to specific events such as fire, theft, or certain types of water damage. To avoid costly surprises, take time to compare policies, and consider speaking with an insurance professional who can clarify the differences and tailor recommendations to your unique needs and location.
EXAMPLE: Your basement is fully finished. A knowledgeable agent might recommend adding a Water and Sewer Backup endorsement, which can help cover a costly backup cleanup for a small additional premium.
When homeowners aren't clear on which perils their insurance policies cover, or what reconstruction cost value limits are on their policy, they could be one unforeseen catastrophe away from losing their home.
Even though some homeowners are financially able to restore their homes significantly or entirely out-of-pocket after a loss, many are not — especially not in the early years of homeownership.
Understanding the concept of Insurance to Value (ITV) — a calculation insurers use to determine if a property is adequately covered or underinsured — you can more clearly recognize when coverage falls short.
How can mitigation help?
Taking mitigation measures – the act of reducing severity, seriousness or loss -- address different catastrophe scenarios can help you lower your insurance costs while also making it easier for insurers to offer protection.
With a firmer grasp of risk realities, you are more likely to analyze the structural characteristics of your property, look beyond local building codes to determine how to best safeguard your home.
Protecting home ownership
By helping understand risk, a knowledgeable, licensed insurance agent can empower you to better understand and manage property risks, ultimately enhancing the security and longevity of the dream of owning your own home.
Risk knowledge is essential to successful homeownership protection
The sooner you invite your insurance agent into the home-buying conversation, the better.
Insurance is NOT a one-size-fits-all proposition. Without a clear understanding of the risks unique to your situation, you may be unlikely to customize or optimize your coverage. When you understand your risks, you can then evaluate your own risk tolerance and make informed coverage decisions.
Many homebuyers — especially first-timers — falsely, yet understandably, believe that the required level of coverage will be enough to protect their financial security. On top of that, traditional home purchasing processes and timelines typically don’t allow enough time for homeowners to develop the knowledge needed to understand insurance, like the tradeoffs of paying a little more money up front for more comprehensive policies, or options for customizable coverage.
Discussing risk earlier in the homebuying process, can help in two important ways – secure adequate coverage, and adopt and implement mitigation/protection measures.
Bare-bones coverage can equal unexpected costly losses
Homeowners should fully understand their property's exposure to hazards and how well their insurance policies cover those risks.
Basic homeowners’ coverage is often limited to specific events such as fire, theft, or certain types of water damage. To avoid costly surprises, take time to compare policies, and consider speaking with an insurance professional who can clarify the differences and tailor recommendations to your unique needs and location.
EXAMPLE: Your basement is fully finished. A knowledgeable agent might recommend adding a Water and Sewer Backup endorsement, which can help cover a costly backup cleanup for a small additional premium.
When homeowners aren't clear on which perils their insurance policies cover, or what reconstruction cost value limits are on their policy, they could be one unforeseen catastrophe away from losing their home.
Even though some homeowners are financially able to restore their homes significantly or entirely out-of-pocket after a loss, many are not — especially not in the early years of homeownership.
Understanding the concept of Insurance to Value (ITV) — a calculation insurers use to determine if a property is adequately covered or underinsured — you can more clearly recognize when coverage falls short.
How can mitigation help?
Taking mitigation measures – the act of reducing severity, seriousness or loss -- address different catastrophe scenarios can help you lower your insurance costs while also making it easier for insurers to offer protection.
With a firmer grasp of risk realities, you are more likely to analyze the structural characteristics of your property, look beyond local building codes to determine how to best safeguard your home.
Protecting home ownership
By helping understand risk, a knowledgeable, licensed insurance agent can empower you to better understand and manage property risks, ultimately enhancing the security and longevity of the dream of owning your own home.
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