Home Insurance Check: Is Your Coverage Keeping Up with Today’s Costs?
Your home is more than just the place you live. It’s where birthdays are celebrated, family dinners are shared, and everyday moments become lasting memories. It’s also one of your biggest financial investments.
That’s why home insurance isn’t simply about protecting the physical structure. It’s about making sure your coverage properly safeguards your investment both today and in the future.
As construction costs, labor, and material prices continue to rise, many homeowners may find their current policy hasn’t kept pace with the actual cost to repair or rebuild their home following a covered loss.
What Happens If Your Home Insurance Hasn’t Kept Up?
If your home insurance doesn’t provide sufficient coverage, you could end up paying more out of pocket for repairs or reconstruction. Your insurance company will generally help cover costs up to your policy’s limits. Any expenses that fall outside this amount become your responsibility.
Most home insurance policies also require you to maintain accurate coverage levels. If your limits are too far below today’s building costs, your insurance company may reduce any claim reimbursements by a penalty. This further widens the gap between what you pay and what your insurance company pays.
Your Home Insurance Checklist
Here are six questions to ask yourself when determining whether your home insurance coverage is keeping up with today’s rising costs. If you’re unsure about any of your answers, the Bearingstar team can help review your policy and make sure your coverage fits your needs.
1. When did you last review your dwelling coverage?
If it’s been a few years, there’s a good chance you won’t have enough coverage to completely rebuild your home at current prices.
Some home insurance policies offer features, such as an Inflation Guard or Extended Replacement Cost Endorsement, to help adjust for rising costs. However, even these safety nets are being outrun by today’s construction market, making it important to still regularly review your dwelling coverage.
Your Bearingstar Consultant can help review your replacement cost estimate and confirm whether your protection matches your home’s current coverage needs.
2. Have you recently started or completed any renovations?
Home renovations can increase what it would take to rebuild your home. Even simple upgrades like replacing carpet with hardwood flooring or adding new built-in shelving can impact your coverage needs.
Whether you’re remodeling your kitchen, updating your bathroom, or finishing your basement, the added value from these projects won’t automatically be reflected in your current coverage. Keep your Bearingstar Consultant in the loop as your projects progress so they can ensure your policy keeps up with the changes you make.
3. Does your home have any special features that are costly or challenging to repair or replace?
If you fell in love with your home because of its original woodwork, custom windows, or detailed trim, it makes sense that you want to preserve them.
However, preservation often comes at a price. The materials needed to restore older architectural details after a covered event may be more expensive and difficult to source. Artisan contractors may also be required to perform the work, which can increase the cost of labor.
Your Bearingstar Consultant will help make sure these special features are included in your home’s replacement cost estimate.
4. Does your home meet today’s building codes?
Older homes have plenty of charm, but they can also feature outdated construction that no longer meets current safety standards.
If your home is being repaired or rebuilt after a covered loss, you may be required to bring certain features up to code, even if they weren’t damaged. For example, older wiring may need to be replaced after a kitchen fire.
Most home insurance policies limit or exclude coverage for these required updates. However, many insurance companies offer an Ordinance or Law Endorsement that can help cover related costs.
If you own an older home, ask your Bearingstar Consultant whether this coverage makes sense for you.
5. Does your home inventory reflect any recent purchases or changes in value?
The cost of construction isn’t the only thing that’s increased. The cost of your belongings has too. Clothes, furniture, appliances, electronics, and everyday household items likely cost more today than they did a few years ago. That means your personal property coverage may also need a review.
Keeping an updated home inventory helps you track what you own and how much it would cost to replace at today’s prices. Don’t forget to include items stored in closets, cabinets, drawers, and other easy-to-forget places, along with photos, videos, and receipts when possible.
Your team at Bearingstar has prepared a downloadable home inventory to help you get started and stay up to date.
6. How old are the appraisals for your specialty items?
If you specifically insure jewelry, firearms, artwork, or other high-value items, your coverage limits can become outdated over time. The values listed on your policy may reflect what the items were worth when they were purchased or last appraised, not what they’re worth today.
Routinely getting new appraisals will help ensure you’re reimbursed fairly in the event of a loss. Share the updated paperwork with your Bearingstar Consultant so they can adjust your policy to account for any increases in value.
Is Your Coverage Ready for Today’s Costs?
Your Bearingstar Insurance team is here to help review your coverage and protect your most valuable asset as the years go by. When you work with us, you’ll gain a local partner who understands how changes in the economy impact your family, neighborhood, and community.
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