How often should I review my homeowner’s insurance policy?
When you are planning your activities for the day, reading your insurance policies is probably not high on your list of desirable things to do, but it is important that you periodically take the time to do so.
When you first secure insurance coverage with a new insurer or an insurer introduces a new product that they move you to, it is important that you read your policy carefully to determine what is covered and what is not covered. The policy will also contain various conditions that you must comply with in order to avoid potential coverage issues.
While it is important that you read the policy from cover to cover, there are a few areas of the policy that you should pay particular attention to.
When it comes to the property coverages, you will want to review property covered, property not covered, the perils covered, the perils excluded, and limits and sub-limits that apply to particular types of property. You will want to review these policy clauses against the types of property you own (or are responsible for) and the amount of such property that you have.
When it comes to the liability coverages, you will want to review the coverage grant and the exclusions. If you have any of the types of liability exposures that are excluded, (for example you have an airplane) you will want to talk with your insurance agent about the exposures and the possibility of insuring the exposures.
Are There Other Times That I Should Review My Insurance Coverage?
Yes. Your exposures are not static. Your exposures change over time. While the insurance coverage that you put in place originally may have been appropriate at that point in time, things may have changed:
- Your exposures to loss and the values of your property at risk may have changed. Examples:
- You put an addition on your home or increased its value through remodeling;
- You added a trampoline or a pool to your yard;
- You are now running a business out of your home;
- You now own a pitbull (some companies either reduce or eliminate liability coverage for certain breeds or dog DNA);
- You bought a horse;
- You purchased expensive art, jewelry, antiques, or musical instruments;
- You installed solar panels or other outdoor equipment of value;
- You acquired boats, jet-skis, or recreational vehicles.
- Your wealth may have increased, and you may want to consider higher liability limits.
- Your insurance company may have made changes to their policies at renewal: Insurance companies are generally required to provide you written notice of change if they intend to make any changes to your policy at renewal that restrict your coverage. It is therefore important to read the notices that your insurer sends you to see if the material includes any notice of material changes in coverage or policy conditions.
- Conditions may have changed that could impact how your coverage may respond. Some examples:
- You no longer have the alarm system that you told the insurer you had;
- Your home is vacant, or is unoccupied some of the time because you are spending a portion of the year somewhere else;
- You are now renting a room to someone or renting your home to someone;
- You installed a wood burning stove.
When exposures and conditions change, your coverage needs can be impacted and your policy coverage could even be restricted. Any time there is a major change (several examples of which are shown above) you may want to revisit your insurance coverages and have a conversation with your insurance agent.
Also, the things that change throughout the year could qualify you for additional discounts with insurers that could lower your premiums:
- You installed a new roof;
- You installed, connected, or upgraded your alarm system;
- You replaced your furnace, cooling, electrical, or plumbing systems;
- You discontinued an in-home business;
- You installed a battery backup on your sump pump.
Annual Insurance Review
Even if you do not think that much has changed in your risk profile or coverage needs, it is advisable to conduct an annual insurance review with your insurance agent to discuss what has changed over the course of the year.
The examples shown above are not the only types of situations that would require a review of your insurance coverages. Any time there is a question about exposures and about coverages needed, you should speak with your professional insurance agent.
Some other Enhanced Insurance articles related to Home Insurance:
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