Marek Insurance Agency, Crosby TX: Home-Auto-Health-Life


What happens when a property is underinsured?


Purchasing home insurance may be overwhelming for first-time homeowners. Numerous coverage options make it difficult for those new to home ownership to establish the needed coverage. Being underinsured indicates that you don’t have adequate home insurance coverage if your home is destroyed in a disaster, including fire or flood.

Causes of Underinsurance

Numerous factors lead to underinsurance, and guessing the overall cost of replacing or rebuilding a home without contacting a reliable professional valuer or builder is one of them. Most homeowners need to account for accumulated assets or home upgrades, updated building codes or labor, increased costs of building materials, and supplementary costs, including clean-up, demolition, surveyors, council applications, and architects. You can visit this page to learn how a tax advisor can assist you in property insurance cost analysis. Some insurance providers include this in their standard policy, but homeowners should assess their insurance policy routinely to minimize the possibility of underinsurance. Underinsurance may also result from the arrival of children, marriage, and lifestyle changes.

What if You’re Underinsured?

Homeowners with underinsured properties may fail to secure adequate insurance coverage if their contents or houses are lost or damaged. Insurance companies cover the amount of a homeowner’s claim up to a given policy limit during the purchase. Opting for a lower level of coverage saves you a few dollars on your preferred policy. If you’re underinsured, you may not secure the full cost to repair or replace your property for any damages resulting in out-of-pocket costs.

Insurance companies only pay up to the amount covered, and homeowners can’t claim additional funds other than those in the coverage. Homeowners should establish the damages bound to be catered for by their insurance policy to diffuse the stress resulting from disaster strikes. Working closely with a reliable insurance representative helps you find the coverage that’s ideal for your needs.

Why Should I Work With a Professional?

Working with an accredited specialist is essential as it helps establish cost assessment options that suit your specific preferences and needs. The two forms of assessment available include:

  • Desktop assessment: A desktop assessment uses multiple data points and satellite imagery to craft a comprehensive report without visiting the premises. The approach plays a crucial role in offering a cost-effective option for less complex properties.
  • Site survey: A site survey entails a visit to a premise and is considered the most accurate approach to valuing the property for insurance purposes. The approach proves effective where there are non-standard construction methods, multiple buildings, and where homes have listed status.

Benefits of Valuing a Property Correctly


Underinsuring your property in your insurance policy indicates that you won’t secure the full cost of a potential loss. The approach may financially impact your business or family due to the payment of additional replacement costs above and over the sums insured. Underinsuring your home is financially devastating, underscoring the need for accurate coverage levels.


Overinsuring your assets means that you’re paying more than your replacement cost should a disaster strike. Forking out higher premiums has no additional benefits, as the value of your property doesn’t warrant it. The insurance provider only pays the necessary amount to reinstate and replace your property.

Ensuring You’re Properly Insured

Homeowners can minimize the possibility of their properties being underinsured by appropriately covering their contents and homes. In doing so, homeowners have peace of mind as there is minimal fear and lessened burdens should something happen to their properties. Follow the listed steps to ensure you have adequate coverage.

  • Update your personal property inventory for belongings and personal items to ensure adequate coverage.
  • Review the property insurance coverage yearly with a reliable insurance representative to secure sufficient coverage depending on your situation.
  • Notify your insurance provider regarding any renovations or changes to your property. Renovating your house adds value but may also lead to underinsured property.

Household Items That May Be Underinsured

Sentimental items, including jewelry, family heirlooms, and watches, may be underinsured as some policies have limits regarding items that may be listed on the insurance policy. Failure to increase the limits of a home insurance policy leads to underinsurance of high-value items such as laptops, watches, engagement rings, expensive items of clothing, and tablets. Most homeowners often need help to increase home insurance policy limits which creates problems when they opt to make an insurance claim. Some providers offer optional portable insurance coverage for items like technology, clothing, and jewelry outside the property.

Understanding Reinstatement Costs

A reinstatement cost assessment establishes the overall amount it costs for a property to be reconstructed from scratch to its initial condition. The assessment report may also show labor costs incurred in a rebuild along with the construction materials, property’s condition, fixtures, and fittings. The calculation also considers economic fluctuations, including inflation. Failure to conduct a reinstatement cost assessment may lead to property over insurance and underinsurance.

The house is the most valuable asset for most of us, indicating the need for adequate property insurance. Although most household items, including heirlooms, jewelry, and photos, are irreplaceable, securing appropriate coverage limits the impact of unexpected damage, which cushions you from significant financial losses.

Need some advice to make sure you have enough coverage?  Give us a call at 281-328-3170 or contact us at our website. 


Ready to Benefit From Decades of Expertise?

Get in touch with Marek Insurance today, and one of our experienced agents will assist you with honest, knowledgeable advice and a range of policy options.  Unlike other insurance providers, we have access to a vast network of insurance companies to find a plan that fits your needs.