Reviewing and Updating Your Homeowner's Insurance
When was the last time you reviewed your home insurance policy? According to Loretta Worters, vice president of the Insurance Information Institute, there are six events that should trigger a review.
1. When your policy comes up for renewal
Don't just automatically send a check to your insurance company. Review your coverage, then call your agent with any questions about your homeowners insurance, including the following:
Has the company made any changes in coverage since last year?
Does my policy now include a separate deductible for risks like hurricane or hail?
Should I raise the deductible to save money or comparison shop for cheaper rates?
Am I taking advantage of all available discounts?
Do I need to raise the amount of coverage for liability, personal possessions or the structure or add a flood, earthquake or an umbrella policy?
2. When you've made major purchases or alterations/improvements to your home
Have you received any expensive or valuable gifts or made any major purchases?
If so, you may need to either increase the amount of insurance you have for your personal possessions or purchase a floater/endorsement for these items, which provides higher and broader coverage for these items than you have under your homeowner's policy.
3. When you've increased the square footage of your home
Have you added a new room, enclosed a porch, expanded a kitchen or bathroom, or added a new structure outside of your home such as a gazebo, shed or pool or hot tub?
If so, report the updates to avoid being underinsured. Keep receipts and records in case you need to forward copies to your company.
4. When you've made your home safer
If you have installed a state-of-the art fire/burglar alarm system or upgraded your heating, plumbing or electrical system, notify your insurance company in case that qualifies you for a discount.
5. When the number of residents in the home changes
Marriage, divorce, children leaving home or elderly relatives moving in can also change the amount of valuables and possessions that need insured.
6. When you've started a home-based business
Talk to your agent about additional coverage for business liability and equipment. If the business is your primary source of income, you may need a Business Owners Package Policy (BOP).
You may also need professional liability coverage, which is excluded under in-home business and business owner's policies. For more information, see III's article on insuring home businesses.
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