Do you know if your home has the proper coverage? Today I’m joined by Logan Matlock from Goosehead Insurance who’s here to talk about how to know if your home is underinsured and what to do about it if so.
Logan typically recommends insuring your home for between $120 and $160 per square foot. However, many people aren’t insured up to that point. With the market changing, that recommendation may become $170 to $180 per square foot.
Many home insurance agents will set homeowners up for the first year, and then that agent will fall out of contact unless the client solicits their help. You should proactively re-shop your policies every year. Some policies may include an inflation guard that causes your policies to jump up 2% to 3%.
However, those built-in inflation guards don’t really make up for what’s actually happening in our crazy market. Some homes appreciated by 14% to 15% last year! The companies that provide those policies don’t necessarily have built-in strategies for what to do if you’re renewing your insurance and your home value has skyrocketed.
Mind you, it’s not necessarily the home value itself that affects your policy. It has to do with your home’s replacement cost, which goes up as your home’s value does. Additionally, the cost of labor and materials for home construction is also on the rise. If you bought your home five years ago for $300,000 and it’s worth $450,000 today, you’re missing out on over $100,000 of insurance, which could be disastrous if the worst should happen.
Now is a great time to meet with your agent to get a new appraisal so that you can ensure your home is covered.
If you have any questions about your home’s coverage, you can reach out to Logan at logan.matlock@goosehead.com or (214) 983-8730. For any other real estate questions, give us a call or send us an email.
