Multi-Policy Packages Leave Most Americans Lacking Sufficient Homeowners Insurance
It appears that manyÂ homeowners insuranceÂ customers are getting the short end of the stick when it comes to coverage. According to a recent survey released by the Insurance Information Institute (I.I.I.), most Americans lack sufficient home insurance coverage –Â and for a host of reasons. But one of the biggest is that they readily pay for multi-policyÂ packages under the advisement of their agents as aÂ cheap home insuranceÂ option, without reviewing home insurance policies to ensure their homes are adequately insured.
Most Americans Don’t Have Enough Homeowners Insurance
The Insurance Information Institute revealed last week that a high number of homeowners are going without adequate homeowners insurance, which can be detrimental if the home is ever damaged or destroyed.
The survey found that nearly half of respondents thought the amount of homeowners insurance necessary was dependent on the real estate value of their homes, while one in three reported that as homeowners seek outÂ cheap home insuranceÂ they purchased less insurance to save money, both of which are mistakes, according to theÂ I.I.I.
But one of the biggest reasons people carry too little coverage, the institute found, was that homeowners readily accepted the coverage their agents recommended, which is typically presented in the form of a multi-policy discount.
Agents often provide a package that covers all insurance in one policy without explaining what coverage is being provided. In fact, the I.I.I.Â found that insurers typically never review policyholder accounts unless the policyholder makes the request. As a result, many homeowners have no idea that they are underinsured.
Cheap Home Insurance From Multi-Policy Packages
It’s important to note that multi-policy packages are not a bad thing. In fact, they can be quite beneficial to homeowners who are looking to avoid multiple insurance bills each month, or are looking to work solely with one company in exchange for cheap home insurance.
The key to benefiting from multi-policy packages — or any insurance product for that matter — is to understand what you’re purchasing.
While it is great to have an agent initiate the conversation about the types of coverage you’ve purchased, it’s up to the homeowners to inquire about the homeowners insurance coverage they’re paying for. You want to ensure that the insurance you’ve purchased not only covers the real estate value of your home, but the cost to rebuild, which is often much higher.
Be sure you review your homeowners insurance policy, page by page, to ensure you’re fully covered before paying a dime. And even after the policy has been purchased, regularly review it and update the coverage to match the cost of its rising value. That way, you never have to worry about your home being fully paid for if a disaster strikes.
(Image:Â Tony Crider)