WASHINGTON COUNTY, Tenn. (WJHL) – Homeowners in Washington County, Tennessee are still sorting out how their new property tax assessments will hit their pocketbooks.
Washington County Assessor of Property Robbie McGuire said residents may want to check with their insurance company to see if they are properly insured.
Joe Proffitt of Joey Proffitt Insurance advised homeowners to ask their agent how much coverage they have and then decide if it’s enough to rebuild their home at its new value.
Proffitt said most insurance companies do have what’s called an “inflation rider” that assumes a home’s value will increase around 3-5% a year, which is why insurance premiums have gone up periodically. However, he added that sometimes those riders don’t keep up with the true cost of rebuilding a home if the company isn’t re-evaluating individual policies often enough.
“As the cost of materials rise, we’ve got to make adjustments to you,” Proffitt said. “The problem now is the cost of materials has gone up so much, sometimes double, a lot of homeowners are underinsured.”
Even before property assessments went out, some property owners were questioning their insurance coverage.
The HOA President of Elk Ridge Condos in Johnson City said she had the insurance company do a rebuild assessment this past fall for the condos and found it would cost nearly $2.5 million dollars to rebuild a home if there were a catastrophic event; the condo association was only insured for $1.4 million.
The insurance coverage at Elk Ridge Condos was increased to make up for that million-dollar gap, and the cost was passed onto owners through higher HOA fees.
Proffitt said to avoid such gaps, he recommends what’s called an H0-5 policy, which is a fully guaranteed policy with no cap, compared to an H0-3 policy which has a set rebuild limit.
“But at the end of the day, you’ve got to have proper coverage. If you don’t have proper coverage and you have a claim situation, you might be left without a home,” said Proffitt.
