Why You Must Review Your Homeowners Policy Annually
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If you have a home, you likely have some form of homeowner’s insurance. This insurance basically provides financial protection from risks to your home including damage from fire and natural disasters. It also means protection of goods and property from theft. Another benefit often overlooked is liability. If anything happens to a person on your property, liability coverage gives you the money to fight a suit in court and pay damages if you lose. Since this coverage is important, it makes sense to check how it changes every year.
Unprecedented Natural Disasters
When you buy a house, you can’t predict everything that will happen while you live there. The recent hurricane in the Northeastern US proved how true this is. Before Hurricane Sandy, beach front property on the Atlantic coast was a hot commodity. However, the failure to assess the risks involved with proximity to the ocean left many without their homes and the means to rebuild them easily. If you are lucky enough for your home to escape major damage, you will likely see an increase in your premiums. Check with your insurance company so you don’t get surprised by your next bill. This applies for any place that experienced a major weather event.
Change In Premiums Due To Lower or Higher Risk
Insurance is an industry built on probabilities. So it makes sense to check on the changes in risk concerning your home. As mentioned earlier, a lot can happen in a year that you may not anticipate. A fire in the area, a rash of robberies, or the building of a new police station can affect the premium on your policy. Checking annually allows you to catch these changes. In some cases the risks to your home in the coming year may be lower. Consult with your insurer if you want to take advantage of lower premiums.
If Your Home Increases in Value
A big problem for many homeowners is when they find out the value of their home outgrew their insurance policy’s coverage. This can expose homeowners to financial difficulty when something happens to their house. That is why homeowners need to know when certain actions increase the value of their home. Improving your kitchen or adding a pool might increase the value of your home without you knowing it. Make sure to consult with your contractor and insurance company to see what home improvements can increase the value of your home. At the same time look into what renovations can actually lower your premiums while maintaining your current coverage.
Checking Annually Can Lower Premiums
It is important enough to repeat often. Checking yearly can save you money on your homeowners insurance premiums. The value of your home and its contents are guaranteed coverage of up to 80 percent of their value on all standard policies. This gives you room to negotiate on the premium if you see ways to reduce risk of loss and damage and changes in valuation for your area. Checking yearly with independent insurers and using online tools gives you information you need to negotiate for great coverage at better prices.
Category: Home Insurance
