Checked Your Homeowners Policy Lately? Due To Rising House Costs, You May Be Underinsured!

It’s been shared on every major news outlet for months — housing costs are soaring across the country, and they’re barely showing signs of slowing down. As a Minnesota homeowner, you may feel relieved that you don’t have to worry about this, considering you already own your house. But did you know that you may still be affected? If you have homeowners insurance in MN, you may now be underinsured due to the inflated housing market. Today, Prokop Insurance Services is here to help you understand what this means, so keep reading, then contact our insurance pros to discuss your home insurance policy.

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What Does It Mean To Be Underinsured?

Being underinsured when it comes to your homeowners insurance means that your policy doesn’t provide enough coverage to replace your home in the event of an accident. For example, you may have your house insured for up to $300,000. But if it would cost more than that to replace your home in a total loss, you don’t have enough coverage and are therefore underinsured. Being underinsured is risky because you’ll be responsible for paying whatever your home isn’t covered for, which could be thousands upon thousands of dollars that you may not have.

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How Does the Housing Market Affect Your Policy?

So, what do rising housing costs have to do with your homeowners insurance in MN? It’s all a chain reaction. As construction and material costs increase to meet the booming demand for housing, the costs to replace your house in the event of a total loss increase, too. As a result, if you haven’t reviewed your home insurance policy lately and your home’s replacement costs have risen, you may be underinsured compared to when you first purchased your policy.

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Three Signs Your House Is Underinsured

An inflated housing market doesn’t guarantee that your home is underinsured, but it’s often a good indicator. However, there are some other signs to look for to determine whether your house needs additional coverage. Prokop Insurance Services has listed three of the most common signs we see among our clients in Minnesota below; don’t hesitate to contact us to discuss your policy if you feel any of them apply to your home.

infographic of 3 signs your home is underinsured
  • You Recently Completed a Renovation
  • When renovating your home, you can’t forget to update your home insurance. As you know, upgrades and remodels increase the value of your property, so they must be accounted for under your insurance coverage. If you fail to update your policy before disaster strikes, your renovations may not be protected, leaving you underinsured and stuck with a costly replacement bill.
  • Local Construction Costs Have Skyrocketed
  • As you read, the housing market affects your homeowners insurance due to a chain reaction of rising costs. If construction costs have skyrocketed in your neck of Minnesota, your current home insurance policy may be outdated and unable to meet the rising costs. To fix this, we suggest adding an extended cost coverage to your policy to protect against unforeseen construction costs that are out of your control.
  • You Have the Minimum Amount of Coverage
  • When you purchased your home insurance, you may have chosen the minimum amount of coverage to save money. While doing so does leave extra cash in your pocket, this could turn out to be an expensive mistake in the event of a total loss! You likely don’t have adequate coverage to protect your home.

Get Help With Homeowners Insurance in MN

If you haven’t checked your homeowners insurance in MN recently, it’d be wise to review it now! Should your home ever fall victim to an accident, you don’t want to find out that you don’t have enough insurance coverage to replace it without paying out of pocket. Especially as housing costs continue to rise, there isn’t a better time to ensure you have the protection you need. It’s no secret that insurance sucks, but that’s why you call the pros! Contact Prokop Insurance Services today for your home insurance needs.

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