Is Your Home Still Properly Covered?

TL: DR With the increased cost of building materials, labor, and other services over the past few years, we highly recommend reevaluating your coverage limits to ensure that you're adequately covered. We do present-day "Rebuild Cost Estimators" with each quote and have increased our standard suggested water backup and rental reimbursement limits. Many companies also offer new add-ons such as sewage line coverage, equipment breakdown, and coverage for undamaged siding/roofing.

It's no secret that our country is facing some of the highest inflation rates of the past few decades. Over the past few years, the cost of building materials, labor, and other services have increased well beyond this high inflation rate. Like most, the insurance industry is feeling the impact and adjusting to try and keep up. But, they can't do this alone.

Most companies have increased their annual "inflation guard" to 6-10% instead of the usual 1.5-3%. This inflation guard means if you have $100,000 of coverage on your home, they're increasing this at your renewal by $6,000-10,000. That said, we're still seeing homes we wrote 3-5 years ago underinsured per today's costs to rebuild. Not only can this leave you short should something happen to your home, but it can also change the terms of your policy and leave you paying out far more than your deductible.

So, whose responsibility is it to ensure a home is appropriately covered and up to date? Generally speaking, it's yours! Most insurance agencies don't review policies unless prompted by the client to do so. If your policies are 3-5+ years old and you haven't checked them lately, they're likely outdated.

At Cura, we run through each renewal and check for items that might flag. These items might include an above-normal rate increase, company adjustments in coverage, and policy longevity. If an item flags, we will complete an internal review and suggest changes or different options to our clients. If it doesn't flag, we generally let it ride another year unless you reach out or schedule a review. With each review and quote, we run an updated "Rebuild Cost Estimator" on your home. This program pulls general specs on your home and estimates what it would cost to rebuild at today's costs.

With an inflation guard, other coverages, such as water backup, don't automatically increase. When I started in insurance in 2015, the standard amount of water backup added to a policy was $5,000. This standard soon after rose to $10,000. As of this year, we generally suggest $25,000 on a standard home with a basement. In addition, many insurance companies have rolled out new coverages they may not have offered when your current policy was written. For example, several insurance companies now provide coverage for your sewage line should this need to be replaced.

There will always be gaps in your insurance policies and circumstances that may cause you to blow through your coverages. Running through your insurance policies every 2-3 years can help reduce these and avoid significant out-of-pocket expenses. 

Please reach out to us at service@curains.com to request a policy review or discuss any questions regarding coverages and potential gaps.