Let’s Talk….Is Your Home Really Insured?

Let’s Talk about your homeowners insurance. While you may have coverage, the question is, are you completely covered? Did you know that approximately 75% of homeowners are underinsured on their homes? To be more precise people are underinsured by an average of 35%. So to make the math simple if you own a $100,000 home you are underinsured by $35,000. If you own a $200,000 home you are underinsured by $70,000.

Let’s say you have a fire and your home is completely destroyed. Who do you suppose must pay the amount of money that your home insurance does not cover? If you said YOU, then YOU are on the money. Guess what, this really happens to people. I recently had a customer tell me of his acquaintance, here in Tuscaloosa, who experienced a fire and had to pay a considerable sum to rebuild his home. This person did not have enough insurance on his home.

It is sad that much of the general population buys insurance on price rather than the amount of insurance that is being offered to the customer. Wouldn’t it make more sense to have an agent ask questions that are specific to your needs? The way an agent does this is by asking questions about the unique characteristics of your home. For instance, an agent should ask you questions like, “how much carpet, vinyl, ceramic tile, and hardwood do you have in your home?” Generally, the agent wants to know what percentage of the floor makeup is represented by each of these products. There are even more detailed questions that the agent should ask about your home, as each house is unique.

If an agent asks you how much insurance you want on your home, or gives you a quote based on the year built and square footage alone, run like you have never run before. Remember this is probably your most expensive possession and it is something you have likely worked hard to obtain. A home is representative of the American Dream. You remember, the dream to have a home large enough to raise your children in and then to live in with your spouse through your AARP cardholding years. If you have read this far and are wondering why so many people are underinsured, it is for the very reason I mentioned a moment ago. People buy insurance on price, not on the best coverage offered for the money. Further, they place little or no value on the insurance agent’s knowledge. This is because competition in the industry has become fierce and people think all companies are equal. This is the furthest thing from the truth.

People should not treat insurance as something they can get anywhere. People should protect themselves by looking for a knowledgeable representative that asks specific questions about their home. People should also look for the best service possible. If you feel your agent took time with you and offered a great explanation of your coverage, then it is likely that you have found a thorough agent that will ensure that his company stands behind you in your time of need.

You know every person out there has a need for homeowners or renters insurance. There is no prejudice when it comes to protecting what we have worked hard to own. I don’t care if you have an apartment with $5,000.00 of belongings or a $500,000 home. I think we can all agree that replacing what we have worked hard for would be next to impossible to do without insurance.

Also, if you use the same company that insures your automobile you will likely receive a discount. For instance, at Farmers we offer 12% off of your automobile for insuring your home or apartment with us. And we offer an additional 15% off of your home policy or renters policy for insuring your automobile with us. That is a 27% savings. For apartment renters, the premium is not expensive, thus the discounts often pay for the renters policy. So please do yourself a favor and inquire about renters insurance, even if you think you can’t afford it. Like I said, you can’t afford to lose what you do have.

As always, I hope this article has been informative. Should you have any questions please don’t hesitate to email me at
ramey@therameyagency.com or call my office at 205-330-9188. I don’t want you to be one of the 75% of Americans that are underinsured.