Keep your homeowner’s insurance policy updated

Everyone should review their homeowner's insurance coverage annually. This is important because it helps you understand your policy and what it covers. Often flood or earthquake insurance is sold separately and is not covered under a standard home insurance policy. Talk to your insurance agent to make sure your home and property are insured at 80% of their current replacement cost.

You also want to make sure detached structures are properly insured, as well as particularly valuable belongings such as jewelry or electronics that may have a specified dollar limit. Review your policy and ask for clarification about any wording, disclaimer, or fine print you don't understand.

In general, a standard homeowner's policy is based on the value of the main house.

For insurance to provide coverage for a complete loss, the amount of the policy should be for at least 80% of the home's value. A house is typically insured at 80% of its current replacement cost. Replacement cost is simply the amount of money it would take to rebuild a similar home based on today's construction prices.

Unfortunately, if you bought your homeowner's policy several years ago and have not updated the policy amount, or do not have inflation protection as part of your policy, you may be underinsured. This is because construction prices have increased.

If your home is insured for less than 80% of the replacement cost, you may receive a prorated or reduced amount on claims you file if your home is severely damaged or destroyed. The difference between the replacement cost of repairs and the amount you receive from insurance will be an out-of-pocket expense.

Protect your home and your finances by updating your homeowner's insurance annually and after any major renovations.

For more information, contact the LaRue County Extension Service Office at 270-358-3401.