If you are a long-time homeowner and have not updated your house and contents insurance in many years, it is likely that you are currently under-insured. This is because the value of your property may have significantly increased from when you first bought it but your insurance policy has not changed to reflect this.
The Dangers of Underinsurance
Underinsurance is when the value of your insurance policy is not enough to cover the actual value of your house and its contents and so does not cover the full cost of any potential loss you may experience. Therefore, should you experience an event which requires you to claim on your insurance policy, you will have to pay for any additional costs which can cause significant financial burden.
How to Make Sure You’re Adequately Covered
To ensure your house and contents insurance is adequate, follow these tips:
- Every few years, check your policy and make sure that it still covers your home and contents. This is particularly important if you make any big changes to your home like renovations.
- Keep an eye on the median value of homes in your neighbourhood; if the value of other properties in the area are rising, then it’s likely that your home’s value is increasing as well.
- When it comes to insurance, it’s never a good idea to cut corners. Choosing a comprehensive insurance policy may seem expensive but can be a lifesaver in the long run.