Thursday, August 23, 2018

A Home Insurance Renewal Checklist

What do you do when you get your homeowner's insurance renewal notice? Do you switch over to autopilot and send off the payment asked for without even looking at your coverage? If you say ‘yes’, yours is not an isolated case: it’s exactly what most people do! This is because what was good enough last year, the year before and for many preceding years, must be good enough for now, they think!

Unfortunately, that is often a very wrong assumption. The value of your home along with all your possessions must have grown over the years. The coverage you had opted for a couple or more of years ago may not be enough today to give you the protection you need.

The renewal notice should be treated as an opportunity to take stock, and fine-tune your coverage to meet your current needs. This does not always mean ‘pay more’. Here are four questions you have to ask when a renewal is due.

Are you eligible for discounts?

You could be eligible for a discount on your policy if you had recently paid off your mortgage, or done some home improvements like putting up a new roof, installing a security system and/or smoke detectors, fitting a sump pump and so on. The amount and type of discount will vary depending on the type of policy and the insurance company.

You could also consider increasing your deductibles. Check with your neighborhood association whether bundling your home and car policies will qualify you for discounts and save you money. Your insurance broker is the best person to help you understand both the coverage you need and the savings you qualify for.

Have you done any remodeling or renovation?

It’s easy to underestimate the value of your home after small renovations. If you have had any work done recently, your home may be worth more than what you think; your insurance coverage must correspond to its real value as of today.

Has your liability increased?

If there are changes in your home that could increase your liability, they ought to be taken into account when you renew your policy. It is surprising how even common things like getting a dog (even the most good-tempered can bite if provoked), or putting up a swimming pool can increase your risk. Renewal is a good time to revisit your liability and ensure that you have the protection you need.

Is your inventory up to date?

The increase in your possessions and their value is something that may go unnoticed. Take a walk around your home and look for items that you have acquired over the last few years, but not covered under your policy. If some or all have significant value, this is the time to modify the coverage to include them. If you have bought things expensive, check if the coverage for them is subject to limits and if special coverage is necessary.

You need to go into all these issues rather closely to ensure that your home insurance coverage is what it should be. Your insurance broker is the right person to walk you through the complexities, and make certain that you have the right coverage at the right cost, with the best discounts.

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