Are You Under-Insured?

Regrettably all too many homeowners do not have enough insurance coverage in the event of a major problem. Surveys conducted regularly vary in their view of the extent of the problem but almost all agree that some two-thirds of all homes are under-insured and that, on the average, these properties are under-insured by around 20 percent.

Usually of course you do not find that you have inadequate cover until disaster strikes and then it is too late. In states like California, in which wildfires are commonly seen, many families were amazed after the latest outbreak of fires to learn that when it came to rebuilding there was insufficient money available to replace their homes.

The problem here does not only involve the total sum for which you are insured but also involves the sort of cover you have. For example, you may be amazed to discover that many the victims of Katrina said that they had been told by their insurance agents that they did not require cover for flooding.

Why then are so many homeowners carrying insufficient insurance? After all, surely it should be in the interest of insurance agents, who are the experts in this particular field, to make sure that their customers are adequatelytotally covered, not merely to protect their own reputations but also because they are generally paid a share of every policy sold.

Regrettably, the answer is simple. Far too many home insurance agents work on volume and so do not bother to take the time to ensure you have the policy that you need for your property but merely sell you whatever they can as fast as they can and then move on to the next customer. In addition, the market these days is extremely competitive and so many insurance agents would rather persuade you to purchase a policy at a lower premium and with less cover than you need than risk you purchasing from somebody else.

As with almost all things in life you receive what you pay for when it comes to property insurance. Of course, you can reduce your monthly costs by having a lower sum assured or by excluding some types of cover but is it wise to do so?

Our homes are often the most expensive purchase we will ever make and our lives, along with those of our family, could literally be turned upside down if we are unable to replace our home if disaster strikes. Also, if you think it could not possible happen to you, just think back to the countless devastating stories that you have heard in the recent past from hurricane Katrina victims and those people affected by the California wildfires.