One particularly important aspect of home insurance is what’s known as the 80% rule. This guideline is enforced by home insurance carriers and generally exists to ensure you’re maintaining certain coverage limits relative to the estimated cost of a complete home rebuild.
The 80% rule states that your home insurance policy must have coverage limits of at least 80% of the estimated cost for the total replacement of your home. For example, if your home is worth $500,000, you must carry $400,000 in coverage.
If you fail to abide by this rule, you may receive lesser payouts for covered losses based on how much you’re underinsured by. For instance, in the aforementioned example, if you’re carrying only $300,000 in coverage for your $500,000 home, you’re only insured for 75% of what the 80% rule says you should be.
In this scenario, your carrier would issue a payout for only 75% of your losses. As such, if you experienced $100,000 in losses, you would only receive $75,000 in aid, minus your deductible, and be saddled with handling the remaining $25,000 yourself.
As you can see, abiding by the 80% rule is critical in ensuring sufficient coverage. That’s why it’s essential to periodically review and update your home insurance policy after repairs, additions or other property changes. For more information about home insurance, contact us today.
How to Winterize Your Garage
Winter can bring harsh conditions, and while you may have already taken steps to protect your home, other structures, such as your garage, may also require attention.
Prevent winter-related damage to your garage and its contents by taking the following steps:
- Insulate. Insulate your garage’s door and walls, as well as any pipes, to limit the risk of them freezing and bursting.
- Seal gaps. Caulk around your garage’s doors and windows to seal cracks and holes. You may also want to install foam gaskets behind the cover plates of switches and outlets.
- Check the roof. Inspect your garage’s roof for any cracks, holes or loose shingles and remediate issues before winter weather makes them worse.
- Be cautious with heaters. Using heaters in your garage may seem like a good idea, but make sure they’re positioned far from flammable materials.
Reach out today for more home safety resources.
This newsletter is intended for informational use only. © 2024 Zywave, Inc. All rights reserved.