Under-Insuring Can Cripple a Home

Reevaluate Every Year; Procrastinators Beware

Insurance providers advise home owners to reevaluate their policies every year when their yearly premium statements arrive. But as home values rose during the last decade and the damage cause by storms increased, many at-risk home owners neglected this yearly assessment, leaving them under-insured and unable to recoup losses in the event of a major disaster.

"The last couple years, with interest rates low people took out loans to make improvements to their homes. Unfortunately a lot of people don't adjust their plans to see if they need additional coverage," said Salvatore.

Major purchases such as home theater systems, stereo equipment or jewelry are also often overlooked, Salvatore said. These types of oversights potentially leave thousands of dollars of property uninsured and could be prevented if consumers anticipate the losses.

Since the Atlantic hurricane season lasts five months, property owners have a large window of time to upgrade their protection. Insurance providers regularly see an uptick in inquiries when disasters like Isabel start appearing on local weather forecasts.

But customers who try to add coverage after hurricanes begin approaching usually find themselves locked out.

FEMA mandates a 30-day waiting period before a new flood insurance policy becomes effective. And new homeowner policy sales or adjustments are typically frozen when storms are forecast.