Throughout life, we make many types of investments. We invest in our 401k plans at work, we open brokerage accounts, but no investment can compare to the investment we make into our homes. Our homes are perhaps the biggest investment we’ll ever make! And yet, many homes still lack adequate coverage and protection despite being our biggest financial decision.
According to the National Fire Protection Association, twenty-seven percent of all reported fires occurred in homes. From 2013 to 2017, a total of $6.9 billion dollars were in lost in property damages due to house fires. On average, the United States received an estimated 354,000 calls for house fires. With statistics such as these, it would behoove any homeowner to take proper precautions in protecting their property. After all, you never want to find yourself in a tough financial position because you lacked adequate coverage.
If you’re a homeowner already, you should definitely take a look at what your insurance covers. Most standard policies cover the following:
1. Dwelling- This would be the primary residence and any attached structures.
2. Detached structures- This would cover things such as garages or sheds.
3. Personal property
When it comes to your personal property, there are two options of protecting your belongings. Firstly, there’s the actual cash value policy. This means the insurance company will pay you the cost of that item at its current market price. Unfortunately, this tends to be the route most insurance companies take as it’ll be cheaper on the insurance company to replace your items. The second type of coverage you can get is replacement cost value. This type of coverage would be more favorable is it requires the insurance company to cover the cost of the replacing the item with something similar despite its current value. While more favorable, this coverage tends to cost more on average than your standard policy. If you’re a current homeowner, it might benefit you to review which policy your home is covered under and seek additional coverage if you know most of your belongings are older.
Additionally, you’ll want to take a look at your additional living expenses coverage (ALE). Sometimes after a fire, your home might not be safe to live in. You might find yourself having to relocate temporarily as they repair your house. This is where your ALE kicks in. This coverage typically covers your hotel costs, restaurant meals, and over costs associated with having to relocate temporarily. This can be a huge lifesaver if you find yourself in a tough spot after losing your house. However, not all policies are created the same. Some contain time limitations and limits for your ALE. Again, it would be to your benefit to review your current policy and see if it fits your needs. Not all homes and situations are created the same way. Some homeowners might need a lot of coverage while others might get by with little. However, doing your research and seeing what works best for you can go a long way to protecting your life’s biggest investment.
To assess your home’s fire insurance coverage and ensure you are protected, contact us at 772-287-3625