Why it is Time to Review Your Home Insurance Policy

By Sheryl Landrum
Home Worth Columnist

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Too often home buyers pay little attention to their home insurance policy. They know they need one when they take a mortgage for their home loan, but do they get enough homeowner's insurance to rebuild and replace their home if it is damaged or lost in a fire? Find out why many Californians are now revisiting their homeowner's insurance.

This October's wildfires in California left many people homeless and needing to rebuild their houses. Unfortunately, what homeowners are now discovering is that the cost to rebuild their homes has gone up significantly in the last few years. Even though the current housing market gives us a break in construction labor, building materials such as concrete, copper, and steel have risen significantly in the past few years due to increased international demand. How do you know if you have enough insurance to cover your losses?

It is time to do some homework and to speak to a reputable insurance representative to make sure your house is adequately covered by insurance. Usually your homeowner's policy covers the cost of rebuilding your house, the loss of contents, and the cost of re-landscaping, as well as dislocation costs. It does not take into account upgrades (like carpets, flooring, and fixtures) or any remodeling you may have recently implemented, which is why our insurance premiums show replacement costs lower than a home's actual value to rebuild. Because many insurance companies also cap what they are willing to pay so you should talk with an insurance professional to ensure your home is adequately covered in case of a disaster. Your home is often your largest investment so make sure yours is protected.

About the Author
Sheryl Landrum is a Senior Loan Officer with First Capital Mortgage of San Diego at the Prudential Realty Office in Bonsall, California.