|
Helpful Tips 3. Is it time for a home
insurance check-up?
Your home is perhaps your most cherished and largest
investment, so naturally you want to have financial
protection in case something happens to your property or its
contents. To offset these costs, you purchase homeowners
insurance. But when was the last time you reviewed your
policy to make sure that your coverage was up-to-date? If
your answer is "when I purchased my home five years ago,"
it's definitely time to take another look at your policy.
Ideally, your homeowners insurance policy should be
evaluated once a year, and sooner if you've completed major
work to your home or have a life event such as marriage, new
baby or divorce. This review will help guard against you
being under- or over-insured. Below are some situations
that will illustrate why it is important to make sure that
your homeowners insurance is current.
Remodeling
Have you added on a room or made significant upgrades to an
existing room in your home? What about structures outside
your home such as a hot tub or gazebo? These improvements,
undoubtedly, have increased the value of your home. When
you purchased your homeowners policy, your coverage was
based on the value of your property at that time. If there
is damage to your home, you want to make sure that those
areas are covered as well.
Safety Upgrades
Did you know most insurance companies give discounts for
features that increase the safety of your home? If you've
installed items such as fire sprinklers, central home
security system, smoke detectors, deadbolt locks or even
added an upgraded electrical system, you could possibly
reduce your premium.
Personal Property
Besides structural coverage, most standard homeowners
insurance policies include personal property coverage.
Usually there is a percentage or dollar limit on the amount
protected.
Take a home inventory. Are your current limits sufficient?
If you've purchased high-ticket items such as computers,
jewelry, and artwork, you may need to get additional
coverage. Talk with your insurance agent to decide if you
should increase your limits or purchase an
endorsement/rider, which will give you higher and broader
coverage than you have under your homeowners policy.
Life Events
Different life events can affect your coverage. For example,
if you get married and your spouse moves into your home, you
will need to make sure that there is enough coverage for
your combined assets and even all of the wedding gifts you
received. On the other hand, if you divorce, you may be able
to decrease your personal property limits.
Deductible
Are your deductibles still relevant? Based on your current
financial situation, you may want to adjust them. A higher
deductible lowers your premium and increases the amount you
will pay toward a loss.
Because the mortgage lender often pays insurance premiums,
it is easy to overlook your insurance coverage. However as
the homeowner, make it a priority to review your policy
periodically and make changes as needed. That way if damage
or loss does occur to your home or its contents, you are
adequately insured. Speak with your insurance agent, who can
give you more in-depth information and explain your policy
to you. |
