A new year is an ideal time to review your homeowners insurance policy to ensure it provides adequate coverage for your home. Many people simply renew their policy, year after year, without reviewing the details, but that can be an expensive mistake.
Start by looking around your home. Have you acquired new computers, expensive flat-screened televisions or other costly electronic items? Be certain that your “contents coverage” is sufficient to replace these items.
Also, many homeowners don’t realize there are limits on coverage of personal property. No matter what the value of your jewelry, furs, watches, artwork or collectibles, standard policies typically will pay only $1,500, and that only covers theft. So if you accidentally drop your diamond ring down the drain, you won’t get a dime. Consider a rider which boosts coverage to your existing homeowners policy. This increase in coverage ensures valuables will be replaced at their appraised value.
Additionally, riders expand coverage for accidental or mysterious disappearance. This kind of coverage is not generally included in a standard homeowners policy. In addition, deductibles aren’t typically attached to this extra form of coverage.
According to insurance professionals, there are five events that should trigger a review of your homeowners policy:
1. When the policy comes up for renewal.
2. When major alterations/improvements are made to your house.
3. When you have made your home safer by installing a state-of-the-art fire/burglar alarm system, or upgraded your heating, plumbing or electrical system.
4. When there have been major lifestyle changes such as a divorce, marriage, or when adult children move back into the family home.
5. When you start a home-based business.
Here are two good resources for more info:
• The Rocky Mountain Insurance Information Association: https://www.rmiia.org/
• The Insurance Information Institute web site is another outstanding resource. Check their website out at: https://www.iii.org/