Having Long Island homeowners insurance means you are likely insuring your home with replacement cost coverage on the dwelling. Now while there is typically a 5% inflation guard on the dwelling value in your policy, what happens when you have economic conditions that change home values dramatically? Answer: You likely have a policy dwelling amount that is nowhere near what your home is worth. If you are over insured, you’re paying for insurance you don’t need. If you are under insured, you are now a “co-insurer” with your insurance company. Meaning, if you suffer a partial or total loss of your home, you will be responsible for a portion of the loss…not good.
Thus, it is important you review your dwelling coverage amount on your HO policy every 2-3 years. Almost every HO policy I’ve written this year, I have found that their home values have been either above or below what they have been insuring their dwelling for. Not to worry however as your broker can help you with this. Here’s what you do:
-Call your broker
-Ask him/her to run a cost estimator on your home. Your county of residence provides tools that insurance agencies use to determine the value of your home
-When your home value is determined, compare it to the dwelling coverage on your HO policy. If it is different, have your broker match that amount on your policy
-Make sure you place an inflation guard on the dwelling amount (typically 5%). Every year, your dwelling amount will increase to ensure your dwelling coverage changes with rising home values (in a normal economy that is)
Bear in mind that if you are under insured and you increase your dwelling amount, your policy premium will go up. If this happens and you do not like the price your agent has given you, call a Long Island NY insurance broker who can shop your policy around for you with other insurance companies. There are plenty of good companies out there that offer competitive rates for HO coverage.