If you’re like most people, the task of reviewing and updating your homeowner’s insurance policy often needs to be put on. However, it’s a critical annual to-do that can save you money.
Homeowners insurance protects residential property, personal belongings, and other assets from damage or loss. In addition, it provides liability protection.
Changes in Personal Circumstances
A homeowners insurance policy may not be the first thing on your annual to-do list, but it is critical to protecting your home and assets. You want to avoid being caught off guard by a devastating fire or theft, and an annual review is the best way to ensure your coverage is adequate.
Changes in personal circumstances can also affect your premiums, including a major purchase or a significant life event like getting married, having a child, or moving to a new house. These changes are considered “insurance-qualifying events” or “life-changing” events in insurance terms and should be considered part of your review.
For example, if you have a significant purchase or inheritance, you must notify your insurer as soon as possible so they can adjust your premium. And it’s a good idea to review your policy after any extensive renovations you’ve done, such as finishing a basement or adding a swimming pool.
Renovations
If you plan on renovating your home, regularly reviewing and updating your homeowner’s insurance policy is essential. This will ensure that your home is fully covered and protected against unforeseen events that could damage it, such as fire or weather disasters.
When you are completing any renovations, it is recommended that you notify your insurance agent as soon as possible to ensure that they can assess your new coverage needs.
Most standard policies include dwelling coverage, which pays to rebuild or repair your home after a disaster. The coverage amount you receive depends on the valuation of your house as determined by the insurance company.
If your home has been renovated, you may need to increase your dwelling coverage as rebuilding costs more than when it was initially built. This is especially true if you are remodeling your home to increase its value or installing higher-quality materials such as marble and high-end appliances in the kitchen.
Endorsements or Riders
A homeowners insurance policy provides peace of mind knowing that your assets are protected in the event of a loss. But to get the most out of your policy, you should regularly review it and consider adding endorsements or riders if needed.
Endorsements are add-ons to a standard homeowners policy, like car insurance, allowing you to tailor your coverage to fit specific needs. They can be added at purchase, during your contract, or during renewal.
Examples of endorsements include sewer and drain backup, identity theft, animal liability, and flood insurance.
These add-ons are a great way to customize your policy and ensure you’re adequately covered in a disaster. However, if you add any of these endorsements to your policy, you must speak with your agent about their impact on your premiums.
Policy Changes
Many must consider updating it regularly before buying a homeowners insurance policy. Reviewing the policy when significant changes occur in your life, such as moving or adding a room, is a good idea.
Another reason to periodically check on your policy is to ensure sufficient coverage. For example, if you have purchased expensive jewelry or art that requires special coverage, you may need to add a rider to your current homeowner’s insurance policy.
Moreover, some companies have premium incentives for homeowners significantly upgrade their properties. These discounts vary but can include credit for installing a new roof or an upgraded security system.
