Your home is likely your largest investment, yet many homeowners carry insurance policies that leave significant gaps in coverage. At Garcia-Mundo Insurance, we regularly review policies for clients who discover they’re underinsured only after a claim.
Mistake #1: Insuring for Market Value Instead of Replacement Cost — Your home’s market value and its replacement cost are two very different numbers. Replacement cost is what it would take to rebuild your home from the ground up at today’s construction prices. Always insure for full replacement cost.
Mistake #2: Ignoring Flood and Sewer Backup Coverage — Standard homeowners policies do not cover flood damage or sewer backup. In the Chicagoland area, where heavy rains and aging infrastructure can cause basement flooding, this coverage is essential.
Mistake #3: Not Updating Your Policy After Renovations — If you’ve remodeled your kitchen, added a bathroom, or finished your basement, your coverage limits may no longer be adequate. Always notify your agent after significant home improvements.
Mistake #4: Overlooking Liability Coverage — If someone is injured on your property, your liability coverage protects you. Most standard policies include $100,000 in liability, but we typically recommend at least $300,000 to $500,000 for adequate protection.
Mistake #5: Not Reviewing Your Policy Annually — Construction costs, property values, and your personal situation change over time. An annual coverage review ensures your policy keeps pace with your needs.
Don’t wait until you need to file a claim to discover gaps in your coverage. Contact Garcia-Mundo Insurance for a free coverage review today.