When Should I Update My Homeowners Insurance Policy?
We don’t need to tell you why home insurance is important, yet updating your policy probably isn’t something at the forefront of your mind. However, knowing when to update your homeowners insurance policy is important because changes to your lifestyle could affect your policy, your coverage, and how much you’re paying.
When Do I Need to Update My Homeowners Insurance?
You’ve Renovated Your Home
It’s essential to notify your insurance provider when you renovate your kitchen, install a new roof, or add a bathroom to your home. Home renovation improvements can have a major influence on the value of your home, requiring your insurance carrier to adjust your property coverage limits to match the replacement expenses. While this may increase your premiums, it is definitely worth it to have adequate coverage in the event of a claim.
You’ve Invested in Better Security
You’re in for a pleasant surprise if you’ve added or upgraded your security system since you last looked for the best home insurance prices. Many homeowners insurance providers give clients who have a monitored security or fire alarm system a discount.
You’ve Bought a Dog!
Liability coverage for dog bites are included in many homeowners insurance policies. The catch is that you must notify your insurance company about your new family member. If you haven’t informed your insurer about your pet before filing a claim, it could affect your policy’s coverage.
Your Circumstances Have Changed
If you’ve retired, changed your career, or now work from home, let your insurance provider know. Providers are usually more lenient to those that spend a lot of time at home since it’s less likely they’ll be have their home invaded.
You Have Something Valuable in Your Possession
If you’ve purchased or been given something worth a lot of money, it’s always a good idea to let your insurance company know. They can adjust your premium to protect you should something go wrong. The same works if you sell or give away something valuable. Call to drop your premium!
What To Do Next
Work Out How Much Coverage You Need
Reviewing your homeowners insurance might not be at the top of your home improvement to-do list. However, following the five guidelines described below will save you time and money in the long run.
Following a series of catastrophic disasters, average yearly premiums are estimated to exceed $1,000, with some homeowners facing double-digit rate increases. Have you taken a thorough look at your insurance coverage recently? No? Then dust it off and turn it into your next project.
Your home itself must be your top priority. However, don’t base your coverage on the appraised worth of the home, which includes land costs. Instead, use the most recent per-square-foot replacement rates in your area, as provided by your local homebuilders association. The disparity can be substantial.
According to the Lincoln Institute, land accounts for 9% of the average home’s worth in New York state. It accounts for more than half of the population in Hawaii.
Is your area vulnerable to extreme weather? Calculate the cost of extended or guaranteed replacement plans, which protect you from inflated labor and raw material costs in the event of a disaster.
Find Out What You’re Not Covered For
If you live in a flood prone area, you may be required to purchase extra flood insurance, which can cost anywhere from $1,700 to $3,300 for a $150,000 building and $50,000 in contents.
Also, keep an eye out for typical exclusions like mold and even broken pipes because of a lack of periodic maintenance. You’re aware of the annoyances that can be found in your home. Use everything you’ve learned to add “endorsements” to your coverage. Have you encountered sewage backups that aren’t covered by most standard insurance policies? For roughly $100 to $250 a year, you can insure yourself against them.
Check the Deductible
It’s possible that it won’t be the same as it was a year ago. Many insurance companies are changing their deductibles from fixed dollar amounts to percentages, which can be a significant adjustment.
To minimize your premiums, opt for the greatest deductible you can afford. However, keep in mind that not all insurers switching from dollars to percentages are lowering prices at the same time. Also, keep in mind that these deductibles are based on the insured worth of your entire property, not just the damage that has to be repaired. So, if your house is worth $400,000, even a 5% deductible may be too much to pay, and you should shop around.
Haggle Down Your Premium
When it comes to renewals, insurers rarely specify how much your premium has increased. So get out last year’s documents and make a comparison. If your prices have increased by more than 5%, contact the company for an explanation.
Knowing whether the rise was because of changes in your risk profile or to market-wide increases will aid you in negotiating and comparison shop, which you should do at least every couple of years.
Besides raising your deductible, you can save money by bundling your car and home insurance, which can save you anywhere from 5% to 15% on your premium. Another 15% can be saved by installing security systems, storm shutters, or a new roof.
Get Everything in Line
Once you’ve let your insurance provider know of any changes, be sure to document and file everything that’s happened during the process – including your new premium rates. This way, you can return to this a few years down the line (or sooner if circumstances change). You can return to your documents and ensure you’re always paying the lowest premium for the coverage you need.
Scanning and storing all of that data digitally in the cloud is a good idea. You don’t want this vital information to be lost if disaster strikes.
Let’s Review Your Situation Together
Contact us and we’ll be happy to discuss your current homeowner’s insurance policy and how we can improve it. Whether you purchased the policy a long time ago despite changes to your home since or if you blind bought a policy based on a random quote online, we can update your policy so it reflects your current situation and needs.