Underinsurance Can Spell Disaster For Homeowners

Insurance is meant to give homeowners peace of mind, but an increasing number of policy holders are putting themselves at risk by neglecting to insure their home and contents adequately.

There is often confusion over the difference between guaranteed and extended replacement value insurance. Guaranteed replacement means that if the home is destroyed or severely damaged, the insurance company will pay for it to be rebuilt, whatever the cost. This is the most secure form of insurance for the homeowner, as it literally means the home is guaranteed to be replaced, but the deal carries a degree of risk to the insurer. While this type of policy used to be standard, it is now becoming increasingly difficult to even find an offer of a guaranteed replacement policy. It is now more common to be offered an extended replacement value policy, which covers a percentage of the value of the home of up to one hundred percent, plus an added percentage towards building costs. A replacement value policy simply pays an agreed set amount if the property is destroyed or badly damaged.

Consumers should also take into account the depreciation in the value of their contents over time, and insure their replacement value, rather than their resale value. After all, if the items are lost or stolen, they will need to be replaced with new items, not second hand ones.

An important aspect of managing the policy in the long term is to keep it up to date. Some policies will have an inflation effect built in, so the insured amount will automatically rise each time the policy comes up for renewal. A professional valuation should still be done on the property regularly, so that the policy holder can renegotiate with the insurance provider if the level of coverage has fallen behind.

David Cannell is a freelance writer and university educator. He is also the owner of http://www.insurance-andmore.com

---

Auto Insurance Primer

What is auto insurance? Auto insurance (or car insurance, motor... Read More

How Can I Compare Life Insurance Quotes?

The online life insurance companies offer a free service where... Read More

Health Insurance Options for Entrepreneurs

One of the most important benefits employed people enjoy is... Read More

UK Young Driver Motor Insurance - Build Your Own No Claims Bonus or Insure through Your Parents

For may young drivers, affording the costs of motor insurance... Read More

Online Insurance Quotes California Auto

Finding insurance quotes for California auto is now pretty easy.... Read More

Underwriting Life Insurance For Diabetics and Diabetic Life Insurance Information

Life Insurance Companies differ in their "underwriting philosophy" when it... Read More

Terrorism: Acts of Terrorism: When Will Insurance Respond?

Insurance policies provide financial protection in a broad range of... Read More

Facts About Renters Insurance

If you rent an apartment or house, you might consider... Read More

Life Insurance: Who Needs It And How Much Do You Need?

Your friendly, neighborhood life insurance agent is most likely to... Read More

Health Care and Health Insurance Costs Can Be Controlled Through Lifestyle Choices

As you probably know all to well, the cost of... Read More

How Much Car Insurance Should You Buy?

Car insurance is one of the most dreaded chunks in... Read More

Why Does Health Insurance Cost So Much?

Why does health insurance cost so much? Year after year,... Read More

Should You Have Higher Deductibles On Your Coverage?

What is a deductible? A deductible is the amount you... Read More

Long Term Care Insurance - Low Cost Alternatives For Budget Conscious Seniors!

With Nursing home Cost's running $4,000 to $6,000 a month... Read More

Affordable Life Insurance!

So, you've decided to purchase life insurance. Well then, you... Read More

Indemnity Insurance For Landlords

As a property owner it is essential to protect yourself... Read More

Canadian Funeral Insurance: Our Final Gift to Those We Love

Most of us don't like thinking about our own funerals,... Read More

Cheap Car Insurance

Finding good car insurance can be very difficult. Here are... Read More

Basic Coverage of Homeowner Insurance Policies

The insurance policy is a package that includes more than... Read More

Check Out The Variety of Auto Insurance Texas Style

They say everything is bigger and better in Texas, and... Read More

What Type of Doctor Should I See Under My HSA?

You can withdraw money from your Health Savings Account (HSA)... Read More

Why Bother With Farmers Auto Insurance?

Farmers auto insurance is a very large insurance company that... Read More

How To Best Handle Health Insurance Plan Changes

Many economists have suggested and recent economic data indicates that... Read More

Life Insurance Settlement

A new financial tool is now available for senior citizens.... Read More

The Great Value Of Accident Photographs

You were humming along on a bright and sunny day... Read More

Car Insurance Advice for Young Drivers in the UK

Over the course of the last ten years, car insurance... Read More

Whole Life Insurance - Whole Life Insurance Information

The original purpose of life insurance was to provide for... Read More

Filing Homeowners Insurance Claim Forms: What Steps to Take

Filing a homeowners insurance claim can be done with ease... Read More

Cheap Auto Insurance Quotes ? Tips For Getting The Lowest Rate

Finding auto insurance quotes online is easy, but finding the... Read More

Is Your Auto Insurance Company Rated?

Several national rating institutions rate insurance companies. Do coverages, rates,... Read More

Inexpensive Life Insurance To Protect What You?ve Earned

Adequate life insurance to cover your income producing ability is... Read More

Business Insurance ? And What You Need To Know

Getting your business up and running is exciting, challenging and... Read More

What Are The Differences Between A Cancellation Notice And Non-renewal Notice?

OK, you take that stroll down to the mailbox excitedly... Read More