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It is always a good idea for homeowners to review their policy at least on an annual basis or at renewal time. In this article, we’ll give you 10 reasons you should review your homeowner’s insurance policy.
Did you realize that your insurance policy is a contract between you and your insurance company? Your insurance policy dictates the type of coverage and benefits that you will receive if a loss should occur, and you place a claim. If something is not listed on your insurance policy, chances are you cannot claim it. That is why it is very important for you to look at your insurance policy on a regular basis or get somebody else to review it for you.
Below are ten reasons you should review your homeowner’s insurance policy:
1. Home Improvements
Many individuals have taken advantage of having to stay home during the COVID-19 pandemic and have spent time making repairs, fixing up their home, or remodeling and upgrading their homes. If you decided to renovate your kitchen, or bathrooms, or add an extra bedroom, add a huge porch or deck, this will increase the replacement cost to your home’s value and should your home experience a loss it is important that your insurance company was made aware of the improvements you made to your home so they can adjust the coverage to account for the increase in value.
2. Your personal contents value increases
When you originally purchased your homeowner’s insurance policy, you also had to estimate the cost it would take to replace any personal contents you had in your home, in the event you suffered a loss. Since you first purchased your homeowner’s policy, most likely, you have purchased additional furnishings, such as a new couch, electronics or big screen TV, jewelry, firearms or even artwork. If you have not contacted your insurance company and adjusted for the added contents and furnishings or anything of major value in your home, you will want to ensure that your home insurance coverage limits are high enough to cover and replace those items if you have a loss.
3. If you started a home business
In many cases insurance companies will require you to increase your coverage to protect your business operations if you are operating out of your home. This coverage could include anything such as computers, to a desk or any other office equipment and supplies, cameras, etc., depending on the type of business you started. Were you aware that you can also take out a separate insurance policy to insure your business equipment and those assets? You should speak with an insurance agent about what type of business coverage you can obtain, while working out of your home.
4. An increase in your property value
When you first purchased your home, is when you started your homeowner’s policy. A lot can change over time, especially when it comes to increases in market value. For example, you may have purchased your home in 2000 for $200,000, and 20 years later, it is now worth $400,000. Let’s say you had a fire that completely destroyed your home. If you only had coverage up to $200,000, that is all you will get from the insurance company, even though it may take much more to rebuild your home. Many insurance companies will automatically review and increase the value of your homeowner’s policy, however, a review of your homeowner’s policy is imperative to ensure that you can rebuild should the need arise. You can also talk with your insurance agent about an endorsement that will add additional building coverage to your policy to cover increased cost of materials.
5. Did you add a swimming pool, hot tub, basketball court, a trampoline, etc.?
While pools and trampolines or other entertainment structures are great to have and to enjoy your home, they also add a new level of risk to your home. In order to properly cover you, should something happen to anyone using that entertainment equipment, you need to assess the liability coverage to protect you and your assets. Your insurance agent can help you determine the correct amount of coverage you need based on the type of entertainment equipment you have added.
6. Did you install a home security system?
If you installed an alarm or home security system these additional safety features, should be noted in your home insurance policy. Most of the time you will find that you qualify for discounts on your policy, as a result of adding this additional security protection.
7. Did you decide to rent your home?
You may have moved out of your home to take a job in another stated and decided not to sell your home, but to rent your home out? If so, you need to adjust your insurance policy. This coverage can also include if you rent it out on platforms like Airbnb or VRBO, or if you have a long-term rental with one tenant. Make certain if you rent your home long term to require the tenant to have renter’s insurance. Have the tenant add your name as an additionally named insured to their policy so you are aware of anytime the policy cancels.
8. Did you purchase a new pet?
Have you added a new pet to your family? While pets can be very exciting and comforting to have in your home, it is important to speak with your insurance agent to inform them of the type of pet you brought into the home. For some pets you may need additional coverage ensuring you are covered should something unforeseen happen. Certain animals are considered higher risk to bite or cause damage to a person or property.
9. Did you have an increase in income/personal assets?
Did you start a new job and your net worth increased? If so, you should make sure that you have enough liability coverage on your homeowner’s insurance policy to cover any liability suit that may be filed against you. As your assets increase in value, it is possible they could be in danger if someone does file a liability suit against you. As your net worth increases, you should also look to increase your liability insurance coverage.
10. Discounts may be available to you.
Many homeowner’s insurance policies will offer discounts. Some change discounts often, so it is important to talk with your insurance company to find any additional discounts you may be entitled to.
Evaluating your insurance policy every year will help give you peace-of-mind knowing that you will be properly covered should something happen. One thing you can also do is get a free policy review from a Public Insurance Adjuster since they deal with the claims process every day and are considered insurance experts? They can review your policy so you can have the proper conversation with your insurance agent.