Jul
22

How much insurance do I need?

If you have a mortgage on your home, or plan on financing your home with the help of a bank, you will most likely be required to carry homeowners insurance on your home.   In Florida, we are vulnerable to many kinds of tropical disasters, so it’s extremely important to make sure your home is properly insured.   We get asked all the time, how much insurance should I get? We asked Insurance Agent Zane Lefko with The John Galt Insurance Agency to help clarify some insurance misconceptions for consumers.

Zane Lefko with The John Galt Insurance Agency says Many consumers are often misinformed regarding insurance, the amount that is needed on their home and the many different things that influence the cost of insurance. Often, when buying a new home, the purchase price comes into the mix as far as how much coverage is required. Something that most people don’t realize is that for homeowners insurance, we do not take into account the value of the land (something that the sales or appraisal price does) which is why your coverage amount might be less than your purchase price or loan amount.”  Buyers, especially first time buyers, often have a difficult time understanding why their insurance limits may be lower than the appraised value of a home.  A quality insurance agent will help a home buyer determine the proper amount of insurance needed to ensure that the home is protected, but not over insured.

So what happens after you purchase your insurance policy and move into your new home? Most homeowner insurance policies renew on an annual basis.   Instead of automatically renewing your policy year after year, it’s wise to have your policy needs reviewed by a professional from time to time.  Zane Lefko says “Just because your agent is telling you that your insurance is the best option available, that may not be entirely true. As an independent agent, I have access to all of the available companies in the state. I recommend my clients contact me to shop their insurance every two years to make sure you are still getting the best option.” Questions suggested by some insurance experts include:  Has the company made any changes in coverage since last year?   Does my policy include a separate deductible for risks like hurricane or hail? Should I raise my deductible to save money? Do I need flood, earthquake, or an umbrella policy?

Other good times to review your policy are when you make major improvements to your home, make your home safer (alarms, new plumbing or electrical, new roof, etc.) or major lifestyle changes such as divorce or additional people living in your home.   Consumers should also evaluate their insurance coverage when they do any major renovation, upgrades or additions to their home. We spend so much money on our homes to make them nice, new and modern but unless you are updating your agent or insurance company, you may not be covered correctly for these additions or upgrades to your home” says Lefko. Additionally, Lefko says that major improvements could even decrease your insurance premium These upgrades sometimes may even help to lower the cost of your insurance! Hurricane shutters, hurricane impact windows, new doors and so on are all things that may help to lower your insurance premium”.

Like most insurance policies, there simply isn’t a “one size fits all” approach to homeowner insurance policies. At the Bobby Poth Real Estate Team, we suggested that our clients ask their insurance agent for multiple quotes, and ask them to help determine the proper amount of insurance needed to make sure that they are protected, without wasting money.

Zane Lefko is a Licensed Insurance Agent at The John Galt Insurance Agency.   Zane has helped several BP Real Estate Team clients with their insurance needs.   Zane can be reached at (954) 283-7496 or at zane@john-galt.com

Bobby Poth leads the Bobby Poth Real Estate Team at Revolution Real Estate, LLC in St. Petersburg, FL.  Bobby has been a licensed real estate salesperson in Florida since 2004 and has experience in all areas of residential real estate.