Report: Homeowners may be under-insured by up to 18 percent

Report: Homeowners may be under-insured by up to 18 percent

Posted:
LUBBOCK, Texas -

It is a crucial part of owning a home.

In the event of a disaster, your insurance may not be enough to cover the damage.

Surveys by Marshall & Swift/Boeckh conducted over the years show nearly three out of five homeowners in the U.S. are under-insured by at least 18 percent.

Aaron Daniel, owner of Aaron Daniel Homes of West Texas, has been a home builder for more than 30 years. He said the cost of construction material has increased over the decades.

"If a homeowner is taking his insurance, and he's not increasing it at all, he's going to see a real surprise if a catastrophic circumstance or situation happens in his life," Daniel said.

If homeowners do not increase replacement values on their coverage, they could be left with a hefty bill.

"With our cost of living and our cost increases on our homes over the years, a good factor would be to make sure you're doing evaluations through a professional like a professional realtor, have them do a comp comparison on your home," Daniel said.

In the middle of storm season, Nichole Forman, an agent with State Farm, said it is even more important for homeowners to review their policies.

"Especially now with the weather coming in, the storms that we've seen, get with your agent, do a review," Forman said. "If you've done any updates to your homes, maybe added on, that information needs to be given to your agent."

Forman suggests going through those changes and different coverages quickly, so one's home is fully covered.

"That way you just know that you're protected if that storm does come through, then you don't have any worries, just be out your deductible, and you know the rest of your coverage is there," she said.

Opting for replacement cost coverage can be more beneficial than actual cash value coverage, she said, which is what many Texan buyers get.

"In a claim, you're not going to be paid the full replacement cost, so say your roof is older, you get a claim check, minus that depreciation, you're probably not going to have near enough money to replace the roof," she said regarding actual cash value coverage.

It can be easy to overlook. Daniel suggests getting a professional to help determine your home's value and replacement costs. He also suggests checking furniture and other personal property inside the home, so you are not paying out of pocket for those either.

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