When you think about why it’s so important to have home insurance, you’re most likely thinking about financially protecting one of your biggest assets should anything happen. With an insurance policy in place, you can help protect your home and family when it matters most. But have you taken the time to sit down and review your home insurance policy to ensure it still meets your needs in the past year?
Having the correct coverage in place means less that you’ll have to worry about. This is why we recommend that you perform an annual review of your policy. So much can happen in a year, and it’s essential that your policy continues to meet your needs as they change.
Top Reasons to Review Your Home Insurance Policy Annually
There are dozens of reasons why you want to review and update your policy. For example, maybe you had a change to your personal property or home valuation, or you added an extension to your home or installed new safety features. All of these things can impact your rates.
1. Your Property Value Increased
During the time you own your property, it’s not unusual to see a market value increase. For instance, maybe you originally purchased your home five years ago for $250,000. Today, it could be worth $325,000. Because this price tends to fluctuate, you would need to boost your coverage to reflect the property value increase. If you don’t and a storm destroys your house and your policy still only values it at $250,000, you’d have to pay the difference out of your pocket.
2. Your Personal Contents Went Up
When you first bought your home insurance policy, you figured out the cost it would take to replace your personal contents due to a loss or damage. Since this time, you’ve most likely added to your personal contents, or you could have replaced items with something of higher value. Maybe you were gifted, or you bought electronics, jewelry, firearms, or artwork. If you did, your current contents insurance amount might not be high enough to replace these items if something happens. You might need to schedule these new items on your policy.
3. There Were Renovations
Maybe you took the leap and renovated your kitchen, added an extra bathroom, finished your basement, or added a new bedroom. Each renovation project you complete will increase how much it costs to replace your home if something happens to it. You want to adjust this coverage level on your insurance policy to cover it.
4. You Started a Business Out of Your Home
If you decided to start a business and work out of your home recently, you have to speak to your insurance company or agent to find out if you want to add additional insurance coverage to protect your new business operations. This coverage could extend to anything from art studio supplies, office and computer equipment, lights, or cameras. Additionally, your home insurance policy might require that you take out a second commercial insurance policy to cover your business assets and equipment. Talking to an agent will let you know what your next steps are and whether or not you have to adjust anything.
5. You Added a Trampoline, Swimming Pool, or Hot Tub
A trampoline, swimming pool, or hot tub are excellent ways to turn your backyard into an entertainment hub for the whole family. But, they also introduce a new level of risk for your insurance company as the chances of an accident go up significantly. So, you have to review your policy to ensure you have the correct liability coverage in place to protect you if someone gets hurt while enjoying or playing on your new additions.
6. Added More Personal Assets
As the years go by and you continue to live in your home, it’s normal for you to add more personal assets because you’ll earn more income, save for retirement, and increase your savings. As these assets start to go up in value, they could very easily be in danger if someone files a liability lawsuit and you don’t have enough coverage to pay for the claim because you didn’t update it. You might also have to adjust your liability coverage based on your finances. When your income and net worth go up, there is a higher risk of having a lawsuit.
7. Added Safety Features
Home surveillance systems, alarms, new locks, and smoke detectors are all very popular because they give peace of mind to homeowners that they can protect their homes. If you add one, two, or all of these safety features to your home, you should talk to your agent. Doing so could entitle you to a few discounts to help save on your monthly premiums because it lowers the risk of you filing a claim.
8. You Added a New Pet
Bringing a new pet home can be a very exciting time. However, you should talk to your insurance company when you do your annual review to let them know that you have a new pet in the house. Some pets won’t require additional coverage or cause your rates to change, but higher-risk breeds can be a bigger liability. Your home insurance could go up if your company assigns a higher risk to your pet’s species or breed based on historical data.
9. Discount Opportunities
It’s not unusual for your home insurance company to change the discounts they have available, so you should contact your agent at your annual review and see if they can give you a full list of their current discounts. Changing careers, getting married, quitting smoking, retiring, and getting a better credit score can all amount to discounts. Also, don’t forget to see about discounts for home improvements like installing a security system, adding a new roof, and updating your plumbing or electrical systems.
If it’s time to do an annual review of your home insurance policy, use Nsure. We compare quotes from over 40 of the top-rated insurance companies in the United States. This way, you can compare multiple policies and get the best rate for the coverage you need.