Riley Schmidt


Hurricane Hilary Highlights Most Homeowners Current Biggest Mistake

Fires, Hurricanes and Earthquakes!! (Yes We had a 5.5 one today)

A message from Suze Orman - She says it best. Listen to her.

"I know budgets may be stretched. But please don’t skimp on your homeowners insurance," Orman recently urged on her blog. "Your home is likely a big part of your net worth. I know it can be tempting to reduce your coverage. That’s rarely a good idea, but certainly doesn’t make much sense given the increase in severe weather events in recent years."

Orman instead implores homeowners to ensure their current insurance provides enough protection.

"The average underinsurance is estimated to be more than 20%. That could end up costing you tens of thousands of dollars if you find out too late that you didn’t have sufficient coverage," Orman wrote.

"At a minimum I want you to have a policy that covers the 'replacement cost' of property damage," she continued. "If you can get a policy with 'extended replacement cost' that's the best choice. In the event you have a major loss, your insurer will consider a payout that is as much as 125% or so of your stated limit with an 'extended replacement cost' policy."

In the past two years, the average homeowner insurance policy has experienced double-digit percentage increases in annual premiums.

Orman discussed how natural disasters are likely to take shape differently depending on the region in which a homeowner lives.

"While hurricanes are the big risk in Florida, wildfires are a persistent risk in California (and this last winter, winter floods hit too). Across the Midwest and South, there were already 10 weather-related losses through June this year that caused at least $1 billion in damage. In July, areas in the Northeast were hit with devastating flooding from fierce rainstorms," Orman wrote.

My Takeaway:  There is a highly likely chance that the present extent of homeowner's insurance on your house is inadequate. It's straightforward; the signs are evident. Inflation, escalating costs of materials and labor, and the increasing frequency of natural disasters all impact your home. It's crucial to ensure it is properly insured. Get in touch with your agent this week and verify the coverage. I contacted mine, and as it turns out, I was indeed underinsured.

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