Colorado has seen its share of tragic fires that destroyed people’s homes and property. These tragedies are compounded when the homeowners’ insurance does not fully cover the value of a home, leaving the family unable to rebuild.
Why does this happen? When you first purchase home insurance to cover replacement costs, the premiums are set based on the home's value at the time of purchase. But if your home significantly increases in value, and your home insurance only covers the original value, there will be a significant deficit in the amount the insurance will give you in times of disaster.
How do you prevent it from happening? It is essential to review your home insurance policy annually. You will want to ensure that your insurance covers the increased value of your home. This may increase your monthly premiums, but it is worth the extra cost if tragedy strikes.
Does this impact condos and townhomes? Yes, if you live in a multi-unit complex in which the HOA covers insurance, you should attend the annual budget meeting to make sure that the HOA is purchasing insurance to cover the increased value of your home adequately.
Properly insuring your home is essential to protecting your investment in your home. And it will be one less burden if, heaven forbid, you lose your home.
For any questions on selling or buying a home, don’t hesitate to contact Chadwick V.R. Williams at Denver Real Estate Professionals. We are happy to be a free resource for all your Colorado real estate needs.
Chadwick V. R. Williams, SRES, CRS, GRI, SRS, Luxury Certified
Broker | REALTOR® | Property Manager