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How often should I review my policy?
There are four
events that should trigger a review of your policy:
1. When your policy comes up for
renewal
Don’t just automatically send a check to your insurance company. Take
the time to review your coverage and call your agent with any questions
or concerns that you may have regarding your homeowners insurance. Ask
yourself the following questions:
- Has the company made any changes in
coverage since last year?
- Does my policy now include a
separate deductible for risks like hurricane or hail?
- Should I raise the deductible to
save money?
- Am I taking advantage of all
available discounts?
- Do I need to raise the amount of
coverage for liability, personal possessions or the structure?
- Should I comparison shop for a
cheaper rate?
- Do I need flood, earthquake or an
umbrella policy?
2. Major purchases or
alterations/improvements to your home
If you have made any major purchases, make sure that you have the
proper coverage. And, don’t forget about gifts. If you have received a
diamond engagement ring or if a member of your family has bought you
expensive artwork or a computer, talk to your agent about either
increasing the amount of insurance you have for your personal
possessions or purchasing a floater/endorsement for these items. A
floater will give you higher and broader coverage for these items than
you have under your homeowners policy.
If you have made major improvements to your home, such as adding a new
room, enclosing a porch or expanding a kitchen or bathroom, you risk
being underinsured if you don't report the increase in square footage
to your insurance company. Don’t forget about new structures outside of
your home. If you have built a gazebo, a new shed for your tools or
installed a pool or hot tub, you need to speak to your agent. Keep
receipts and records in case you need to forward copies to your company.
3. You have made your home safer
If you have installed a state-of-the art fire/burglar alarm system or
upgraded your heating, plumbing or electrical system, make sure that
your insurance company knows about these improvements. You may qualify
for a discount.
4. Major lifestyle changes
Marriage, divorce, or adult children who move back into the family
home, can all affect your homeowners insurance. When people move in or
move out, they take their belongings with them. And you may need
additional coverage if there is a sizable increase in the value of the
belongings in your home.
Starting a home-based business can also trigger changes in your
coverage. You will need to get additional coverage for business
liability and equipment. If the business is your primary source of
income, you may need a Businessowners Package Policy (BOP). You may
also need professional liability coverage, which is excluded under
in-home business and businessowners policies.
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