Property Casualty 360 recently published advice from the Property Casualty Insurers Association of America (PCI) warning about the most critical mistakes homeowners make ahead of tornado season. Their guidelines apply not just to tornadoes but also to a variety of other natural disasters that threaten homes. Here are some of the common mistakes PCI highlights:
Not understanding the homeowners policy.
"Unfortunately, after every major event some residents are caught financially unprepared and there is the all-too-common refrain, 'I thought I was covered!' Although insurance covers many situations, PCI recommends that a policyholder speak with his or her insurance agent regarding the way your coverage works."
Ensuring that homeowners have a thorough and comprehensive understanding of their coverage provides the insight and preparation they need to face an unforeseen incident at home. Whether that's a tornado, hurricane, fire or flood, a working understanding of a homeowners policy is important. Knowing what is covered is just as important as learning about what's not covered, especially if a property is prone to damages that require an additional policy to be taken out. Separate policies for earthquake and flood insurance can protect a homeowner's finances in the event that those incidents occur.
Not conducting an annual review.
"Conducting an annual review of your insurance policy helps ensure that your home and belongings are fully protected, PCI says. It provides you with the opportunity to address potential gaps in coverage, and enables you to speak with your insurance agent, ask questions and better understand your coverage."
Homeowners should have a working relationship with their agent so issues can be addressed on an ongoing basis. Rather than viewing the policy as a static document, approaching it as an evolving protection requires policyholders to be proactive about making updates to it. Property Casualty 360 explains that these reviews are particularly necessary after a busy year of renovations or upgrades, as those can alter the replacement value of a property. On the converse, homeowners might be paying too much for more coverage than they need, so a new valuation can lead to lower premium payments.
PCI also urges homeowners to update their home inventories on a regular basis to account for newly purchased items. Whether they use a spreadsheet or pen and paper, documenting the contents of a home also helps prepare homeowners for incidental loss or damage. Under the guidance of an agent, these considerations can improve the quality of a policy.
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