Many Texas Homeowners Under-Insured, Industry Trade Group Warns

Reliable estimates reveal that between 50 to 70 percent of homeowners do not have enough insurance to rebuild their homes in the event it is completely destroyed, an insurance industry trade group Southwestern Insurance Information Service (SIIS) says.

“It is unfortunate that many people living in Texas do not come to that realization until they have sustained catastrophic damage and discovered their insurance coverage falls far short of the cost to rebuild their home,” said Jerry Johns, president of SIIS.

This was dramatically pointed out following a series of hurricanes in Florida and wildfires in Arizona and California when people found there were not enough insurance dollars to replace what was destroyed, he said.

“There is no better time than now to revisit the amount of insurance carried on a home and be certain it is sufficient to cover a major loss,” he added. “Storm season is about to reach its peak in Texas.”

Replacement cost is amount necessary to reconstruct one’s home and should not be confused with the tax appraisal, he stressed.

Johns suggested that homeowners talk with their insurance agent or call their insurance company directly to discuss these topics.

“Insuring a home to its full value is not exclusive to hurricane affected areas,” he said. “It is not uncommon for devastating tornados or a fire to destroy homes in just about every region of Texas.

“Some of the things a homeowner should consider are any improvements such as upgraded bathrooms, kitchens or other unique features to a home, local building codes and increases in construction costs,” Johns noted.

“It is also a good idea to maintain a current inventory of personal items in a home” he added. “A video tape or hand-written account should be kept in a safe place away from the home.”

“It would be a sad experience to suffer the complete destruction of a home and find out that it was underinsured by thousands of dollars,” he concluded.

Source: Southwestern Insurance Information Service, www.siisinfo.org/