Like buying a Homeowners insurance policy, updating it is crucial. Your home’s value won’t remain the same as when you bought it, as its value may increase due to the sophisticated features you added (that also increase replacement or repairing costs) or today’s market value. This emphasizes the need for sufficient insurance coverage to stay covered at all times against any risks. Nonetheless, do you know when you need to update it? Read more to find out.
How Much Coverage Do I Require?
As a homeowner, you should review your policy annually to determine the coverage you need depending on the additions and exclusions. However, do not consider your home’s purchase price, taxable value, or mortgage amount when determining the required coverage. Instead, consider your home’s cost according to the current building material and labor costs.
Also, consider the current building codes requiring higher repair/replacement costs. This is because, now, a structure that suffered more than 50% damage of its current value is considered a constructive total loss. Some laws prohibit repairing such structures, necessitating the building to be completely rebuilt according to the current code, including elevation.
If your home is underinsured at the time of loss, you will need to pay a penalty or accept a reduction in the coverage amount. To avoid such things, make sure to review and update your policy every year or at least as needed.
Circumstances That Call for Policy Updates
It is good to update your homeowner’s insurance policy if you have:
Renovated Your Home
Home improvements like installing a new roof, adding a cast-iron clawfoot tub to your bathroom, constructing a pool in your backyard, and renovating your kitchen, will increase your home’s replacement costs. Therefore, it is necessary to update your coverage limits accordingly. It may increase your premiums but will save you in the long run.
Liabilities like dog bites are usually covered by a homeowners insurance policy. However, you should inform your insurance provider about your pet so that they will update your policy accordingly. Otherwise, your coverage may be denied.
Upgraded Your Security System
Many home insurance providers offer discounts for homes featuring security systems, such as CCTV cameras and fire alarms. Therefore, check with your provider whether they offer such discounts.
Purchased/Sold Valuable Possessions
If you have bought expensive items, like jewelry and artwork, inform your insurance company to increase your coverage limits to protect those during disasters or theft. You can drop off the valuables coverage if you have sold or given away such items.
Some providers may lower the premiums of homeowners spending more time at home, as it mitigates the chance of your home being invaded or vandalized. Therefore, inform your insurance provider if you work from home or have retired.
Consult with Duane Weber Insurance, Inc.
Whether you are looking to buy homeowners insurance or update it, contact us at Duane Weber Insurance, Inc. today. We will help you find the right insurance policy satisfying your current needs and situation.