Is Your Home as Protected as You Think? It’s Time for a Policy Review – Kiplinger’s Personal Finance

Across my 20+ years of helping business owners with their personal and business finances, I’ve gained many valuable insights on a variety of topics. I’ve come to realize that people often pay too little attention to their insurance coverages. In particular, many people fail to understand the importance of regularly reviewing their policies. This is especially true of homeowners insurance. If you haven’t taken a recent look at your policy, you could be setting yourself up for disastrous consequences.

Although you likely purchased an appropriate amount of coverage when you first took out your policy, property values tend to rise. The coverage you had on your home 10 years ago probably won’t cut it, today. Because real estate tends to ebb and flow, it’s a good practice to review your homeowners insurance coverage annually to ensure you’re adequately covered. So, what should you look for?

Property Damage and Loss

As you know, homeowners insurance will cover the expenses (minus deductibles) to replace, repair or even rebuild your home, exterior structures and belongings in the event of a natural or man-made disaster. For example, if a hailstorm destroys your roof, homeowners insurance should cover the costs to replace or repair your roof. Similarly, homeowners insurance will help you rebuild if fire engulfs your house, detached garage or shed. 

When you experience this type of catastrophe, you still need a place to stay while your home is being repaired or rebuilt. Homeowners insurance will cover the costs of your alternative living arrangements during that time. Additionally, homeowners insurance is there if your home is burglarized. Your homeowners policy helps to replace any valuables that are stolen. 

It’s important to thoroughly examine which events your policy will cover and look for any gaps that might exist within your coverage. This is especially true in our current market. With recent price increases in real estate, it’s possible that the property replacement value on your homeowners policy won’t cover the increase to your property’s current value.

Personal Liability

As a homeowner, you’re responsible for what takes place on your property. Unfortunately, that means you could be held liable if someone tripped and fell on your porch steps, causing personal injury. The good news is homeowners insurance provides you with liability coverage for such unfortunate occasions. The personal liability portion of your homeowners policy helps to cover their medical and legal expenses. Therefore, you want to understand exactly how much of those expenses your policy covers. If the neighbor breaks their ankle in some fantastical way and requires multiple surgeries to repair it, the expenses could add up very quickly. In such a …….


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