When to Review Your Home Insurance

Many of us haven’t thought about our homeowners insurance coverage for many years. In fact, it is sadly common to find that most people haven’t even reviewed their coverage since they bought the policy. How about a few tips that may prompt a review of your coverage:

Reconstruction Costs Have Changed

The majority of insurance policy have a built in inflation guard endorsement which increases coverage very slightly each year in order to keep up with the increase of rebuild costs. This does not take into consideration any remodeling, additions or any upgrades which may leave you under-insured in the event of a loss.

A Large Purchase of Personal Property

Perhaps the most common item which comes to mind may be jewelry but there are many more possibilities;  computer equipment, tools, furs, silverware, antiques and many other similar examples which may or may not be covered under the unendorsed homeowners insurance policy. Home insurance policies have limitations (or sub-limits) on personal property as well as exclusions for certain items.

Changes causing increased risk

The first indication would be a change most likely causing an increase of the risk of bodily injury to a visitor;  perhaps a swimming pool, a diving board, a trampoline, or a fire pit. Initially, you’d need to find out if your policy will allow the risk and if so, if you need to increase the current coverage to make sure you are adequately covered.

Tips

It is best to review your home insurance policy every 3 – 5 years; however, the most common issue is that homeowners don’t seem to take the time to thoroughly understand their coverage until they seem to be arguing with an adjuster following a claim – this is the wrong time for all concerned.

By and large, the industry realizes that denial of risk is common by homeowners but clearly, the underlying reason is avoidance of the acceptance of risk to mentally nullify the necessity for insurance thus attempting to purchase the most minimal coverage and avoid adding any premium.

We find that insurance should be made with the mindset of what you would need following a devastating loss.  Many times, the homeowner is much better off adding all the possible options (endorsements) and combating the premium by substantially increasing the deductible – an all-win scenario.

Everyone wins with higher deductibles; we eliminate the reliance of insurance in the event of small claims,  we substantially reduce the insurance premium, and in the event of large losses, the deductible would only be a minor set back.  Before settling for Cheap Insurance, review what you have and take the time to speak to a professional and not a ‘salesperson’ about your options and saving money!