I am taking a class by the AMAZING Dave Ramsey called, Financial Peace University.
Quick plug: The course is completely worth the time and effort. Should you see it offered near you TAKE THE COURSE. It is 13 weeks and fantastic, neigh I say life changing! If you have a teenager or young adult in your life whom you care for deeply, get them in this course! You will never learn so much in so little time!
I am off my soap box now on to the task at hand. How long had you had your current home owner's insurance policy? 3 years? 10 years? 30 years? Well, I have personally had my homeowner's policy for 6 years. When we got our policy we shopped around, we made sure we had replacement coverage, etc. We were diligent and educated... which, at this point, means beans!
I am a very knowledgeable Realtor. I pride myself on my knowledge level in all things real estate. I thought insurance took care of itself once the policy was written. I must admit that again, I have learned something from someone who knows more than me. Thank you Dave!
We all need to call our insurance agents TODAY. Find out what our deductibles are and if it would make better sense to raise the deductible a little to have a lower payment. Afterall, it makes no sense whatsoever to call upon your homeowner's policy if your repair need is under $1500-2000. I understand that is a lot of money but frivolous use of your insurance policy these days can lead to your policy being needlessly cancelled or to having the claim affect the resale-ability of your home in the future. You may want to consider upping the deductible for a lower annual premium.
Second, MAKE SURE you confirm that your home have "guaranteed replacement coverage." This means that, God forbid, something happen to your home the insurance policy will replace the home no matter the cost. Many policies have been changed over the years to "extended replacement cost." And you never know, in all those pages of the policy yours may have been changed unbeknownst to you. "Extended replacement coverage" means if your home is damaged the insurance company will cover up to the amount of the policy plus 10-20% over that amount (different companies offer different percentage overage). So let's say you have owned your home for 6 years. You bought it for $200,000 and your policy is extended replacement coverage for the amount of $240,000 BUT replacement cost of your home, due to appreciation, market, etc, is now $300,000. You would be stuck with a $60,000 bill that is not covered under your insurance policy. OUCH!
You are probably covered but it certainly makes a good case for a phone call to your friendly neighborhood insurance agent. I am looking forward to saving a little bit of money AND making sure my home is properly covered. That is one more thing I don't have to worry about this summer. Have a great week!
And remember, call me with any of your real estate questions. I would love to help!