Adequate insurance coverage is the foundation of a sound financial plan. No matter how well your investments perform, an unforeseen emergency such as a fire, theft or natural disaster may leave you completely unprepared not only to meet the financial needs of your retirement, but your immediate needs as well. This is why it’s vitally important that you review your homeowners and other insurance policies on at least an annual basis (and when your circumstances change) to make sure they’ll provide the coverage you need should such an event occur.
Questions to Ask Yourself to See if You Are Underinsured
All too often, we take out a policy when we first purchase our home only to “set it and forget it” and continue to pay premiums year after year without ever stopping to understand what we’re actually paying for. The following are some questions you should ask yourself to see if you might be underinsured:
Have building costs gone up since I took out my policy?
If labor and material costs have increased since that time, you might find yourself underinsured should you have to file a claim to repair or rebuild your home.
Have I made substantial home improvements?
Maybe you’ve added on a master suite, a deck or home theater. If so, your policy should reflect the building costs to repair or replace such improvements should you ever have to file a claim.
Have the value of my possessions increased?
Things like new furniture, kitchen appliances or electronics may require increases to the coverage on your contents, which is usually determined by a percentage of home value. If your home value has stayed the same, but you have more valuable stuff in it, then you may need to raise your homeowners insurance coverage.
Have I acquired valuables excluded under my homeowners policy?
Perhaps you’ve developed a new-found appreciation for modern art or antiques. These types of items and others often are excluded from your regular coverage and require additional riders to protect them. NFP can design specific valuables insurance to provide special protection for individual pieces or entire collections of jewelry, art, antiques, collectibles or any other property of special value that you wish to insure.
Has my net worth significantly increased?
Having greater assets may leave you more vulnerable in the event of a lawsuit or other loss. If this is the case, you may want to ask your insurance agent about a personal umbrella policy that provides additional coverage beyond what is offered in home and auto insurance policies. Such coverage is often relatively inexpensive for the additional protection it provides.
Is my home vulnerable to flooding?
Many assume that flood damage is covered under their regular homeowners insurance, when it actually requires a flood insurance and excess flood policy. We can help you determine whether your house is located in a flood zone and offer separate primary and excess coverage for flood-related damages and losses.
Do i need to personal cyber insurance?
Many people assume cyber risks are covered under homeowners or renters insurance. In reality, coverage is often limited or excluded. Personal cyber insurance is designed specifically to address modern risks like online fraud, identity restoration costs and digital asset loss.
How NFP Can Help
Insurance isn’t just about meeting requirements, it’s about protecting what you’ve worked hard to build. Taking the time to review your coverage and address potential gaps can help ensure your home, possessions, and financial future are better protected against the unexpected. To learn more about personal insurance solutions and how NFP can help you build coverage that evolves with your life, visit nfp.com and connect with a trusted advisor who can help you take the next step with confidence.
