Your home is not just your castle, it is also a long-term investment that needs to be protected in case of financial loss. Your homeowners insurance policy is there as a safeguard against financial loss due to theft, burglary, weather damage, fire damage, and to protect you in case of liability issues. But once you purchase your homeowners policy should you brush your hands and say, “that’s that” and leave it be?
This simple answer is no. Your homeowners policy was put into place at the time you purchased your home and at the current value of the home at that time. Even though insurance companies have formulas for updating the insured value each year, the formulas are not perfect. It is always wise to periodically ask for a homeowners policy review.
A homeowners policy review can be requested from your agent. It will allow your home’s value to be re-assessed and billed for the correct value. After years of coverage you may be paying too much premium if your home has not increased in value as much, or you may be under insured if your home has appreciated more than the average rate.
Additionally, you should let your agent know about other household changes or updates since the last review. Any of the below items may affect the coverage and the cost of premium for your policy.
- Home improvements or renovations - New flooring, appliances, cabinetry, or any renovations you have made to your home can affect it’s replacement value.
- Home additions - More square feet and additional bedrooms or bathrooms can also increase the value of your home.
- Pets - Yes, even certain breeds of pets may affect the liability value of your policy.
- Home inventory - Update your home inventory annually. If you find that you have added some high-end value items such as a home theater you may want to increase your personal property loss coverage.
Find a way to remind yourself to do a regular homeowners policy review. Keeping your policy updated will not only give you peace of mind in case of loss, but it will prevent surprises during a claim on the policy.
Tags: home value, homeowners insurance, homeowners policy, homeowners policy review, insured value, liability, personal property loss coverage