Your home is likely the most expensive thing you’ll ever buy, which is why you got homeowners insurance when you purchased it. While many feel content knowing they have coverage, too often they file their policy away and forget it. But that’s a mistake.
Like annual home maintenance, an annual homeowners insurance review of your policy is something that can go a long way when it comes to protecting your home. So if protecting your family’s home and belongings is on your list of new year resolutions it’s time to dig up that policy, sit down with a cup of coffee (or tea) and review!
Many homeowners only take a closer look at their policy AFTER a disaster, and unfortunately find their homes are under-insured. In fact according to a survey done by Marshall & Swift/Boeckh, a leading provider of building replacement cost data, 59% of American homeowners fall into the homeowners insurance gap. But even if you fall into the category of homeowners that are properly insured an annual review is important.
As your life changes so do your needs and in turn so do your home’s needs. For example the market may have changed and therefore the cost of rebuilding or purchasing a new home in the case of a loss may require an increase in coverage.
Another example is if you’ve made an upgrade to your home or done a renovation that increased the value of your home, upgrading your policy can help assure that you’ll be fully protected. You may even be able to get additional discounts to your premium (that’s incentive enough, don’t you think?).
Reviewing your policy can also help spot any holes in your original coverage which will need adjustments. Start by taking out your policy and reading it carefully. Ask yourself the following questions:
- Would my policy cover the cost of rebuilding my house today?
- Have recent renovations changed my coverage needs?
- If you have a finished basement, do you have proper water/flood coverage for potential water damage?
- Are my outdoor appliances and/or landscape properly covered?
- Do I need extended coverage for personal liability, valuables, ALE or anything else?
- Is there any way to lower my premium without sacrificing coverage?
An annual review of your homeowners policy is a precaution worth taking, as it ensures proper coverage and a proper understanding of what you are entitled to in the case of a claim. If you have yet to really look at the fine print of your policy or if it’s been a year since your last review, add it to your January to do list and let it me one of the first new year resolutions to cross off your 2015 check list!