Make Ends Meet: Underinsured homeowners and renters insurance

LOUISVILLE, Ky. (WAVE) - It’s that time of year families and friends are gathering for the holidays.

As people come together with those we love, there is one thing they may want to add to their list, and that is checking their homeowners or rental insurance.

That may not put a person in the holiday spirit, but it will certainly help make ends meet.

People can’t deck the halls if their home is destroyed by a flood or a tornado, and their insurance policy will not cover the cost to rebuild a home because they are underinsured, or if they are a renter and all their possessions are burned in a fire.

Simply put, underinsured means their homeowners or renters insurance police is insufficient.

Dustin Lemick is the founder and CEO of BriteCo, an innovative jewelry and watch insurance company. He knows the importance of insuring those things that are most precious to you.

“Insurance whether it’s homeowners or renters is really important,” Lemick said.

Insurance is a way to manage risk. When a person buys insurance, they purchase protection against unexpected financial losses.

In other words, if something happens to a person, their property or to someone on their property, financial compensation is paid for that loss, damage, or injury.

“There are just so many things that happen whether it’s a flooded basement, a fire in the house that burns the whole house down,” Lemick said. “You know you’re talking about life altering events.”

If a person rents their home, a landlord’s insurance is unlikely to cover anything that belongs to them.

“What would you do if you lost all of your clothes and shoes and bags and TVs and all those things?” Lemick asked.

If they are a homeowner, they can own a home without homeowners insurance, but most mortgage or home equity loan holders will require that their home be insured. Loan holders will escrow their insurance payments with your mortgage.

After a home is paid off, this will not happen. People have to make sure to pay for their home insurance or it could lapse, and their home will not be insured.

From California wildfires, to Kentucky’s tornadoes and floods and Florida’s hurricanes, disaster and destruction can happen anywhere at any time.

“I mean, think about how much that really adds up,” Lemick said.  “I mean, it can really add up.”

What if a person had to rebuild their home? What if a person was underinsured?

“We see a lot of folks that are drastically underinsured,” Lemick said.

Underinsured means a person’s insurance policy may no longer fully cover the cost of repairing or rebuilding your home, especially if a person adds the cost of also replacing the items lost in their home.

“That’s problematic, because if something were to happen you won’t be fully covered,” Lemick said.

A person may need to reevaluate the amount of coverage they need.  The more expensive a person’s home and the items within that home, the more coverage a person will need.

This has changed drastically since the pandemic with all the supply chain issues and inflation.  Home prices and material cost have skyrocketed over the last year. This affects a person’s homeowner’s insurance.

Many people did home improvement projects during the pandemic, which can also affect a person’s insurance.  People should look over their policy at least once a year.

“Make sure you have really good coverage, otherwise there’s almost really no point in having no insurance,” Lemick said.

Like anything else, people pay hard earned cash for take time to look for discounts.

“If you have a safe, if you have an alarm system, if you pay annually, things like that will reduce the cost,” Lemick said.

People need to know what’s covered in their policy along with what exclusions or limitations exist. Find out if there are any gaps in a policy, like will it cover a flood and if not, or how any gaps can be filled.

Homeowners will need to know before a disaster hits, not after.  It’s good to know beforehand, so they’re not left trying to figure how to rebuild their life and their home because their policy just won’t cover the bill.

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