Is it time to update your home insurance?

Learn more about instances when it could be beneficial to update your home insurance policy.

 

Is your home insurance policy up for renewal? You might want to take some time to reevaluate your policy.

Why? Because certain changes to your home - and even your lifestyle - could help you qualify for available discounts.

"As a matter of practice, when a homeowner is shopping for insurance or ready to renew a policy, they should always ask their agent or company what discounts they qualify to receive," says Pete Moraga, spokesman for the Insurance Information Network of California (IINC).

Still not convinced it’s time to re-evaluate your home insurance policy? Keep reading for some reasons you might want to reconsider that notion.

Reason #1 - You've Recently Remodeled Your Home

If you’ve recently completed a home remodel - whether it’s expanding your kitchen or adding on a guest room - it may be time to reassess your home insurance policy.

"Many home improvements may have just a little impact on the cost of the policy, but if the improvement is not noted in the policy, it may not be covered,” says Moraga.

In addition, "you risk being underinsured if you don't report the increase in square footage to your insurance company," according to the Insurance Information Institute (III) article, "How Often Should I Review My Policy?"

Remodeling projects also include any new additions to the outside of your home, says the "Review My Policy" article. If you've put in a gazebo or a new shed, for example, consider contacting your insurance agent.

Reason #2 - You've Made a Big Purchase

Did you recently get an expensive piece of art or a shiny diamond necklace? After you admire its beauty, be sure to report it to your insurance agent.

And let's not forget about valuable gifts. According to the "Review My Policy" article, it is important that you have sufficient coverage for recently acquired gifts - like that sparkly engagement ring.

Just keep in mind that some home insurance policies may include "per item" limits, usually between $1,500 and $2,500, says Moraga.

"If you buy a $5,000 giant plasma TV, and your policy per item limit is $1,500, you would only get the $1,500 if the TV were stolen," adds Moraga.

So how do you get more coverage? The "Review My Policy" article recommends talking to your insurance agent about raising the coverage for your personal possessions or buying a floater/endorsement - an individual policy that provides higher coverage for your expensive items.

Reason #3 - You've Made Safety Improvements to Your Home

Did you know that making safety updates to your home could help you save money on your insurance policy? It's true.

"If the improvement is a safety feature, some insurers may offer discounts," says Moraga.

But what is considered a safety-related improvement? According to Moraga, automatic fire sprinklers, fire-resistant roofs, and burglar alarms tied into a response system are just some examples.
And if you live in an area with high occurrences of natural disasters or windstorms, you could get a discount for making your home more disaster-resistant.

For example: "You may be able to save on your premiums by adding storm shutters, shatter-proof glass, reinforcing your roof, or buying stronger roofing materials," according to the III's article, "How to Save Money on Your Homeowners Insurance."

Reason #4 - You've Made Changes in Your Household or Lifestyle

Whether it’s your child leaving for college or your mother-in-law moving in, if there’s been a change in your family dynamics, it could be a good time to revise your home insurance policy.

According to the "Review My Policy" article, circumstances affecting the number of people living under your roof - divorce, marriage, or adult children/family members moving away or back home - are all reasons to review your coverage needs.

"When people move in or move out, they take their belongings with them," says the "Review my Policy" article. "And you may need additional coverage if there is a sizable increase in the value of the belongings in your home."

In addition, changes in lifestyle could also help lower your insurance rates.

"Many insurance companies offer discounts to retirees because they know the homeowners will be spending more time at home and be able to prevent many claims from happening," Moraga says.
And if you stop smoking, some companies even offer discounts for non-smokers, adds Moraga.

Reason #5 - You Have a New Furry Family Member

Did you know that your new dog could affect your home insurance needs? If Fido or Spike bites someone who is legally on your property, extra insurance coverage could help protect you.

Even if you think that your furry friend would never hurt a soul, friendly dogs can attack if frightened - about 4.5 million people in the U.S. are bitten by dogs annually, according to the Centers for Disease Control and Prevention.

And when these dog bites occur, more than 50 percent happen on the dog owner's property, according to III's 2010 press release, "Lawsuits Can Take a Bite Out of Your Wallet; Be a Responsible Dog Owner."

With dog bites accounting for more than one-third of all 2009 homeowners insurance liability claims - says the III's "Lawsuits" press release - it's even more important to make sure that you're covered.
"The insurance industry pays out about $400 million each year just for dog bites," says Moraga.
The good news is that home insurance companies generally cover dog bite liability.

"Most standard homeowners' policies provide policyholders with anywhere from $100,000 to $300,000 in liability coverage," says the III's "Lawsuits" press release. "However, once a dog has bitten someone, your insurance company may charge a higher premium or exclude the dog from coverage."