Home Value: Do We Have Enough Property Coverage? Essential for Homeowners (104)

Are you confident that your home insurance will cover you in times of crisis? When disaster strikes, many homeowners discover they lack sufficient protection. In this episode, I dive into the world of property and casualty insurance, especially as it relates to rising 📈 home values and recent catastrophic events across the country. 

The importance of maintaining accurate insurance levels for your home and this conversation underscores the urgency of reevaluating your current policy to reflect your home's true worth. 

• Often-overlooked aspects of liability coverage
• Safeguarding not only your home but also your wealth against unforeseen accidents
• Specialty items and the need for riders or additional coverage to protect valuables from damage or theft

We also introduce the concept of umbrella coverage, debunking misconceptions about its high costs while emphasizing its crucial role in financial safety. 

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If you or someone you care about could use the help of a financial advisor and sees the value in establishing a financial plan, please reach out to me.

Thanks for Listening!

Jonathan

Chapters

• 15:00 Importance of Property & Casualty Insurance
• 45:00 Evaluating Home Insurance Coverage
• 3:50:00 Umbrella Policies & Their Necessity

Transcript

Speaker 1: 0:07

Welcome back to the what the Wealth podcast. I'm your host, jonathan Bednar, certified financial planner and owner of Paradigm Wealth Partners here in Knoxville, tennessee. I want to talk about property and casualty insurance for a little bit. There's been a lot of damage from the fires in Los Angeles, as well as flooding in eastern Tennessee and western North Carolina from Hurricane Helene, and I think it's important to kind of sit back and think about your own insurance and how much risk maybe you're taking Now. Hopefully, you never have to deal with a catastrophic event, but they happen, and so you want to make sure you're prepared. What I want to talk about today is your home insurance and are you covered for the full value of your home. If you've purchased a home over the last four, five, six years or even longer, you may have seen a lot of appreciation in the value of your home, and so what I've seen is I've started to review some policies for clients this year is that they don't have enough insurance to cover their home value. So, as an example, I looked at one this past probably a couple of weeks or so ago that showed a home insurance value or coverage amount for $965,000. And when you pull their house up on Zillow. Their house is worth about $1.4 million, and so what I just noticed right out of the gate is if something catastrophic happened to their house a fire, you know, floods, like it did in eastern North Carolina, excuse me, yeah, western North Carolina or eastern Tennessee and it just wipes out the house then you might find yourself where you don't have enough coverage to rebuild the structure to the way that you had it. So it's important to look at your property and casualty insurance and make sure that you have enough coverage on your house to keep up with the increased value. You're going to want to make sure you've got enough coverage where, if someone falls or gets hurt or an accident happens on your property, that there's enough coverage liability coverage there to help you cover for medical expenses or anything like that. You're gonna want to make sure that if you have additional items in your home maybe their firearms, maybe it's a wine collection, maybe it's an art collection, maybe it's that you've got additional riders on your policy to cover those specific items you're going to want the information on. You're going to want not social security number but serial number. You're going to want value receipts, if you have them, but you're going to want to know, have an inventory of these items so that when you have this specific additional rider, you've got the value of those items covered specifically.

Speaker 1: 3:12

And then the other thing I want you to think about is your umbrella coverage. Make sure you've got umbrella coverage so that, above and beyond what the home would cover or even auto cover, you've got additional coverage to protect you as kind of a fail safe for a higher amount. So, and usually once you have your home insurance and your car insurance, your auto insurance with the carrier, the umbrella insurance is really, really cheap. In fact, I've got a $2 million umbrella insurance coverage for me and my family and it costs like $300 a year. It's really really cheap to have that additional insurance.

Speaker 1: 3:50

So pull out your property and casualty insurance declaration pages, property and casualty insurance declaration pages and if you don't have one handy, call your agent and ask them and spend some time looking through. Am I covered? Do I have enough coverage If something happens? And again this all came from these couple of significant events we've had Again the fires in Los Angeles and the flood from Helene and just the mass destruction that's had and impacted people's lives and then I start to think about if they don't have enough coverage, it's going to be really hard to rebuild the homes at the value that the homes were, and so they end up losing a significant amount of wealth just from the destruction. So pull those policies out and if you need help from me, I'm happy to have a conversation and help you. Call your agent, see if you can just sit down with them and make sure you've got enough coverage for your increased value of your home, that you have an umbrella policy If you have a car wreck, that there's enough coverage for uninsured motorists or for someone that maybe gets hurt either in your vehicle or someone else's vehicle. It's good to sit down once a year even if you don't do it once a year, every couple of years and reevaluate is the coverage set up for you to help you if you end up having to rely on it? So that's my spiel for today.

Speaker 1: 5:23

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Speaker 1: 6:02

The information in this podcast is informational, in general in nature and does not take into consideration the listener's personal circumstances. This podcast is not intended to be a substitute for specific and financial, legal or tax advice. You should consult the approved qualified professional prior to making a final decision. Securities offered through LPL Financial member. Finra SIPC. Paradigm Wealth Partners is the other business name for Independent Advisor Alliance. Investment advice offered through Independent Advisor Alliance, a registered investment advisor. Independent Advisor Alliance and Paradigm Wealth Partners are separate entities from LPL Financial.