In today’s current circumstances, many insured homeowners across the country are at risk of being underinsured.
According to a survey conducted by Harris Poll and the American Property Casualty Insurance Association (APCIA), a majority of homeowners have not taken important steps to ensure their insurance coverage is keeping pace with home renovations, rising inflation, and increased building costs.
In fact, the price of construction materials rose by 44% from December 2019 through December 2021, but only 30% of insured homeowners have purchased more insurance or increased coverage limits to compensate for rising building costs.
Further, among insured homeowners who completed renovations or remodels during the pandemic, only 40% updated their home insurance to account for those changes.
What are key habits that homeowners can adopt to ensure that they are financially prepared for the next disaster?
- Update policies annually to ensure enough coverage: Circumstances are rarely static. As your home and surrounding conditions change, so do your insurance needs.
- Conduct an annual review of your insurance policies: An annual review of your policies helps you stay current with what your coverages protect and where you may have gaps to fill with supplemental coverage or additional policies.
- Create and update an annual home inventory: Having an up-to-date home inventory will make it easier to file insurance claims and help you purchase the correct amount of insurance.
What can agents do to help?
- Educate clients: In 2022, 26% of homeowners said they didn’t know they should contact their insurance agent when making home renovations. Agents can help close the insurance protection gap by encouraging clients to contact them when renovations are made.
- Build a relationship with clients: Being proactive and staying in regular contact with clients is a helpful way to learn about the changes to their home and insurance needs.
Palomar is an industry leader at providing comprehensive, flexible specialty insurance coverages.