National survey reveals homeowners at risk of being underinsured
COLUMBUS – Ohio Department of Insurance director Judith L. French is urging Ohioans to review their homeowners insurance coverage amounts and features. With most home valuations having increased and building materials and labor costs high, homeowners could be underinsured leaving them responsible to pay potentially significant repair and rebuild expenses out of pocket.
A national APCIA/Harris Poll survey indicates that a majority of homeowners across the country have not taken steps to ensure their insurance coverage is keeping pace.
“Along with conducting an annual insurance review with an insurance agent, changes in the marketplace can be reasons to adjust your insurance protections,” French said. “Examine coverage amounts and policy features while weighing the premium cost and the out-of-pocket financial risk.”
Different standard homeowners insurance products are available, including replacement cost policies that provide coverage to rebuild a home with comparable materials. Add-on features can provide more financial protection when it comes to inflation and increased materials and construction costs. Extended replacement cost coverage protects a certain amount above a policy’s dollar limit and there is not a cap with guaranteed replacement cost coverage to get a home back to its pre-damaged state.
Additional features that can be evaluated include inflation protection, building code/ordinance, and additional living expenses coverages.
The survey noted that two-thirds of homeowners may be without key additional coverages suited for these challenging market conditions. It also found that only 30 percent of insured homeowners have purchased more insurance or increased coverage limits to compensate for rising building costs.
Educational homeowners insurance information is available from the Ohio Department of Insurance and the National Association of Insurance Commissioners at www.insurance.ohio.gov and www.naic.org. Department representatives at 800-686-1526 and firstname.lastname@example.org can answer questions.