Reasons For Altering Your Homeowners Insurance
But by not reviewing your policy yearly, you may end up spending more money than you need to on your policy. It can also mean that, should something happen to your property and the possessions contained within, those items you didn't include will not be covered.
There are some major purchases and events that can occur within a lifetime, and these can affect both your rates and your coverage. Ten of them are below, and each warrants a revisit of your homeowners insurance policy.
Transfer of Ownership
If you transferred any of your assets to a family limited partnership, trust or limited liability company, you will need to add it as an additional insured on your policy. In the event that you have transferred your home into a trust for estate planning purposes, both the trust name and your name will have to be included. Other assets whose ownership can be transferred include artwork and vehicles.
Home Renovations
If you recently finished renovating your home, you must report those changes to your insurance company. Doing so with new additions to your home will ensure that you are adequately covered in the event of theft or damage. If you've purchased furniture or other new items for your renovated area, such as a television set or exercise equipment, you may need to increase the coverage on your possessions. You will need to look at your current inventory and the coverage limits on your policy to see if an increase is needed.
Marriage Or Divorce
These are two life events which can change your coverage significantly. If you've just been married, your homeowners policy will have to be updated to include your spouse's valuables or expensive items like your wedding gifts and rings. If you've completed a divorce, those items owned by your former spouse will have to be taken off of your policy. And if you have moved from a house into an apartment, a renters' policy will be needed.
Buying Or Selling
No matter which you find yourself doing, your insurance policy needs to reflect your home's current market value. It will be too late to get coverage if you wait until a natural disaster has happened. When revising your policy, be sure to look at rebuilding and not the market value of your home.
Empty Nest
If your children are leaving home, you will need to revisit your policy, eliminating any previously-covered items which will be leaving your home. If your child is heading to a college or university where they will be living in a dorm, your homeowners insurance may be sufficient to cover them. Communicating with your company to let them know about these changes can end up in your paying less on your premiums.
Inheriting Valuables
If you have lost a family member who has left you any valuable items, your policy need to be reviewed. Items like fine art, furs, jewelry and high-end collectibles in the form of instruments, coins, guns, wines or cameras must be covered. You can choose to list these items separately, or opt for possibly cheaper coverage by including them in a 'collectibles rider'. Any valuables that have increased in value will also warrant an policy revision.
Increased Costs
Everything is rising in price, including the cost of building materials.
This means that a review of your policy may be necessary to accurately reflect
current prices. But be warned: knowing the difference between the market value
of your home and replacement value are two very different things. While the
value of the land your home sits on can rise or fall, it's unlikely that your
home's rebuilding costs will decrease, especially if a large number of homes
were damaged in your area. When you are faced with any of these scenarios, it might be a great time to get a variety of home owners insurance quotes in order to compare your available options.
