What Happens Next?
A current customer of Insurance For Texans learned a hard lesson about not having enough coverage before they found us. Before we tell you what they learned from that hard lesson, let us show you how they learned it.
No one expects a house fire. It's the worst nightmare of parents. Fortunately, for this family the people were totally fine. But the house was not. In Bob's mind, the good news is that his family had home insurance. Which is true. But the bad news is that Bob was working with a call center that was simply focused on getting his price to a certain level without knowing what he actually had to insure correctly. So the claim was filed, Bob and his family began replacing their belongings, the site was cleaned up, and the rebuilding process began.
When you lose your home to a fire, it can turn into a many month process of trying to rebuild everything. You typically move into temporary housing under your loss of use coverage and begin the process of buying all of that new stuff. Bob and his family were no different. They then sat down with the builder who was going to rebuild their home so that they can continue on with their lives. It all sounded great. Until it wasn't.
As the rebuilding process began, the costs really began to rack up. Bob discovered that a one off build was substantially more expensive than the track home development down the road. His builder couldn't get the volume pricing discount like that the large builder, and the labor costs were also higher. Bob began to worry about what was going to happen.
When the Ft Worth Home Insurance Policy was put in place, the dwelling amount was intentionally kept low so that the premium and deductibles were kept low as well. Bob didn't really think twice about this as he just knew he wanted his costs to be as low as possible. The call center employee who was helping him buy the policy was all too eager to help him reduce it as well because they simply wanted to make the sale. But as the costs escalated during the rebuild process, it soon became apparent that there would not be enough money to cover the process of rebuilding Bob's home. And he did not know what to expect. And the call center wasn't much help either.
What Happens Next?
In the world of Texas homeowners insurance, when you undervalue the cost to replace the home, you are subject to a couple of different problems. Problem number one is that your extended replacement cost coverage can be excluded from the policy. Being able to access that coverage is based on the fact that your home was insured for the proper amount of coverage. So if you're 15% too low, they can prohibit you from using it.
Which brings us to problem number two. When you are 15% too low, you can be subjected to a penalty that is known as co-insurance. This penalty will actually reduce the amount of money that you would otherwise be entitled to in the claim process. In this instance, the amount of money that is too low was now being reduced by that penalty leaving Bob and his family holding an even bigger bag to finish out the home rebuild with few options.
The End Of The Story
Fortunately for Bob, he had some equity in his house that allowed him to obtain a loan to complete the rebuild on his home. That was the expensive lesson and brings us to the moment where Insurance For Texans became involved. Bob knew he wanted to have the right coverage for his family's largest physical asset. He sought out a local Independent Insurance Agent who could help him understand his policy and truly evaluate what he needed. He came to realize that having an advocate working on his behalf meant that if this unthinkable ever happened again, he knew that his policy would completely take care of his family rather than leave him in a lurch financially.
If you aren't sure if you have enough coverage or too much, talk to a local independent agent like Insurance For Texans today. That way you can sleep soundly knowing that you have what you need if a big claim ever comes calling on you and your family.