I would appreciate your feedback on my current home insurance policy and any reasonable adjustments I should consider.
I own a single-family home that I purchased for $350,000 two years ago in Connecticut. Here are the details of my coverage:
Coverages:
- Coverage A – Dwelling: $381,000
- Coverage B – Other Structures: $38,100
- Coverage C – Personal Property: $190,500
- Coverage D – Loss of Use: $76,200
- Coverage E – Personal Liability (Bodily Injury and Property Damage, per occurrence): $300,000
- Coverage F – Medical Payments to Others (per person): $1,000
Deductibles:
- Property Coverage Deductible (All Other Perils): $5,000
- Hurricane Deductible (5% of Coverage A – Dwelling Limit): $19,050
Optional Coverages:
- Hurricane Percentage Deductible (HQ-181 CT (05-17)): Included
- Water Backup and Sump Discharge or Overflow Coverage (HQ-208 CW (08-20)): $5,000 (Included)
- Personal Property Replacement Cost Loss Settlement (HQ-290 CW (02-21)): Included
Estimated Annual Premium: $1,454.00
Thank you!
Your home insurance coverage appears to be fairly comprehensive, but there are a few areas you might consider reviewing or adjusting based on your specific needs and circumstances. Here are some suggestions and considerations:
You bought the home for $350,000 two years ago, and your current coverage of $381,000 is a reasonable increase considering potential appreciation in property value. However, it’s essential to periodically reassess the market value of your home and related construction costs. You might want to consider increasing this coverage if you believe property values in your area have risen significantly or if the cost to rebuild has increased.
Coverage B – Other Structures:
Currently at $38,100, this is usually set at about 10% of Coverage A. If you have significant structures like a large shed, garage, or deck, ensure this coverage adequately reflects their worth.
Coverage C – Personal Property:
At $190,500, this generally covers 50-75% of your dwelling coverage. It’s important to perform a home inventory to ensure this is sufficient to cover all your personal belongings. If you own valuable items (like electronics, jewelry, etc.), consider increasing this coverage or adding riders for specific items.
Coverage D – Loss of Use:
$76,200 generally covers additional living expenses if you were to vacate the home due to a covered loss. This typically runs at 20-30% of Coverage A. Assess your living expenses to see if this amount is adequate for your costs.
Coverage E – Personal Liability:
At $300,000, this is a standard amount, but depending on your assets and risk factors (like having a swimming pool or owning pets), it could be beneficial to increase this limit to protect against lawsuits.
Coverage F – Medical Payments:
The $1,000 limit is typical, but you might want to consider increasing this to $5,000 or more if you have frequent guests or are concerned about potential medical costs for injuries on your property.
Deductibles:
$5,000 for property coverage seems high; consider what you could comfortably pay out of pocket in the event of a claim. A higher deductible generally lowers your premium, but be cautious to balance savings with potential out-of-pocket costs in a claim situation. The hurricane deductible is also significant, approaching 5% of your dwelling coverage, which is standard in coastal areas but could be a considerable amount if you were to incur damage.
Additional Coverages:
The optional coverages you have are good; particularly personal property replacement cost coverage, which ensures you receive a full replacement cost for your belongings. Consider if additional coverages might be beneficial based on your risk factors (e.g., flood insurance if you live in a flood-prone area).
Home Premium:
Overall, the key is to evaluate your personal situation, the value of your belongings, and what risks you may be more susceptible to in your area. Keeping your policy updated is vital to ensure you have adequate coverage for unexpected events.