Many home owners purchase their home owner’s insurance and then forget about the policy, paying it annually without giving it much thought. However, if you have made any changes to your home or your circumstances have changed, it may be a good time to review your home owner’s insurance coverage. This will ensure you have the right insurance coverage to provide you with financial security if something happens to your home.
The Homeowner Insurance Coverage Review Checklist
As you go over your home owner’s insurance policy, make sure you evaluate the following:
Dwelling Coverage
Without proper dwelling coverage, you could face serious penalties. As you look at your homeowner insurance coverage in this area, make sure you have enough to cover rebuilding your structure. This makes it even more important to evaluate if you have made any major changes to your home.
Replacement Cost vs. Actual Cash Value
If the contents of your home are damaged or destroyed, replacement or actual value coverage provided by your home owner’s insurance goes into effect. Replacement pays enough to fully recover the items, without subtracting depreciation. While actual value is less expensive, it deducts depreciation and usually doesn’t provide enough coverage to replace the items at today’s market value.
Liability Coverage
This feature of your homeowner insurance coverage provides payment when someone is injured while on your property or damage to their property occurs. If you don’t have the appropriate amount of liability coverage, you could find yourself in financial ruin in an attempt to pay the bills. Your insurance agent can help you determine the proper amount to best fit your needs and your budget.
Specific Items
A home owner’s insurance policy often includes coverage for the contents of your home up to a certain amount. Unfortunately, more expensive items, such as televisions, expensive jewelry, and fur coats, are often not included in general policies. If you have acquired any high-ticket items since you last reviewed your policy, it is time to update your coverage.
Other Structures
Your home may not be the only building on your property. If you have a separate garage, shed, swimming pool or other building, you need to make sure your home owner’s insurance coverage includes these structures.
Property Inflation
As time goes on, the cost of rebuilding your structure will increase. Many insurance companies automatically adjust the policy for inflation, but it is always a good idea to make sure yours does.
Other Considerations
There are a few other considerations you should also make when reviewing your homeowner insurance coverage. For instance, building ordinance and water sewer backup coverage can be essential. You should also check for policy changes with your company and find out whether you qualify for any new discounts since your last policy review. Checking all these factors on a regular basis can ensure you have the proper coverage if something happens. If you are ready to reevaluate your home owner’s insurance, contact us. We will look over your policy and show you ways to improve your coverage.