Hey there, fellow homeowners!
As you know, your home’s value has likely shot up in recent years! With the real estate market on the rise, property values are reaching new heights. But what does this mean for your home insurance? Well, it’s time to chat about why adjusting your deductible to match your home’s increased value is essential.
Let’s simplify things a bit.
First off, why the sudden spike in home values? It’s a mix of factors: supply and demand, economic growth, even changes in local neighborhoods. But regardless of the cause, the bottom line is your home is probably worth more today than when you first bought it.
Now, onto insurance. When you chose our agency to insure your home insurance policy, you likely picked a deductible, right? That’s the amount you agree to chip in before your insurance kicks in. We probably steered you toward the lowest available deductible at the most competitive rate we could secure. However, the landscape has shifted in the insurance realm. What used to be a negligible disparity in premiums during the good old days has evolved. With the uptick in your home’s value, the expenses for its replacement or repair in the event of a covered loss have escalated. If you opt to maintain a low deductible, prepare yourself for elevated policy costs unless you’re open to assuming a portion of the risk.
Let’s paint a picture with an example:
Say you bought your home a decade ago for $400,000, with a $1,000 deductible. Fast forward to now, and thanks to the booming market, your home’s value has soared to $700,000. If disaster strikes and you need to file a claim, the repair or replacement costs might skyrocket.
So, what’s the fix? Adjusting your deductible to match your home’s increased value is a smart move. In other words, consider bumping up your deductible to ensure you’re well-covered for major losses.
Let’s circle back to our example:
Boosting your deductible from $1,000 to $2,500 or even $5,000 could save you money on premiums. Plus, with a higher deductible, you’re taking more responsibility for covering smaller claims out of pocket, which can help keep your long-term insurance costs down.
Here’s the kicker: insurance companies want homeowners to share more of the cost. They’re requiring higher deductibles for wind and hail damage on new policies and hiking rates significantly for lower-deductible ones.
Remember, every homeowner’s situation is unique. It’s crucial to weigh your options carefully and chat with us to find the best deductible for your needs. After all, your home isn’t just a house—it’s your sanctuary. Let’s ensure it’s properly safeguarded!
Stay safe and enjoy your homeownership journey!