Anyone who owns a home probably has a homeowner’s insurance policy. Your mortgage lender requires that you carry insurance on the home at all times as a condition of your mortgage. And even if you don’t have a mortgage, most homeowners (and renters) want to be sure their home and belongings are protected against fire, theft, and other perils. But when is the last time you gave any thought to your insurance policy and what it covers? Probably when you initially bought the policy or if you ever had to make a claim. Anytime is a good time to do an insurance review, and especially if your policy is coming up for renewal. Changes in your home, your job or business, or your assets can impact your coverage. Make a plan to call your insurance carrier to review your policy and make adjustments as needed. Here are some questions you may want to ask your insurer about and some items that could impact your coverage:
- What are your deductibles and what would it do to your premiums if you raise or lower your deductible amount? Generally speaking, the lower your deductible (i.e., the amount you are responsible to pay before the insurance coverage kicks in), the higher your premium.
- Does your policy automatically adjust to increase coverage as your home gains value and as the costs of construction increase? Do you have full replacement value coverage or will your insurance only pay out the value of the lost item (e.g., will they give you the value of your used TV or enough to buy a new TV)?
- Do you have different insurers for your home, your cars, your rec vehicles (RVs, boats, etc.), your business, etc.? You may find you will receive significant savings if you bundle your policies and purchase coverage from a single insurer.
- Have you made significant upgrades to your home, such as an addition, renovations to your kitchen or bathrooms, a finished basement, new windows, etc.? Let your insurer know of these upgrades, send them photos and information on how much you spent so they can be sure your policy has adequate coverage for the additional spaces or upgraded finishes you added.
- Have you installed additional security features, like an alarm system, a fire and smoke detection system, security cameras, etc.? If so, let your insurer know since it could mean some discounts on your policy.
- Do you have a home business or a home office set up? Are you sometimes doing short-term rentals (like Airbnb, etc.) out of your home? There are additional coverages available to specifically cover that business activity and assets. And if you are having clients or customers come to your home for business purposes, you may want to review your liability and umbrella coverage, to ensure adequate coverage in case someone gets hurt in your home.
- Certain acts of nature are not covered in a standard policy. A few years ago, when we had an earthquake in the DC area, I learned that damage from earthquakes is not covered in the standard policy, but a special rider could be added for that. If that is something you are concerned about, you may be able to add that to your policy.
- Similarly damage from floods due to weather events are generally not covered by a standard policy and unfortunately, many homeowners only realize that once they’ve suffered losses from a flood. When you buy a house located in a federally designated flood zone, your mortgage lender can require that you purchase a flood insurance policy. Many homeowners NOT in a flood zone often do not buy flood insurance if not required. However, there is growing concern that the federal flood zone maps are not up to date and do not keep pace with the increased risks of flood arising from climate change and bigger and more frequent storms and hurricanes. According to a recent Consumer Reports article, “Of the millions of North and South Carolina homes damaged by recent flooding from Hurricane Florence, only about 339,000 are covered by national flood insurance, according to the most recent records of the Federal Emergency Management Agency. The many victims without flood coverage will not get help from their homeowners insurance policies. Only flood insurance covers water damage caused by weather and other external forces.” You may want to discuss with your insurer what flood insurance options are available to you. If you don’t know whether or not you are in a federally-designated flood zone, just enter your address in FEMA’s interactive map to find out.
- Have you recently acquired some valuable belongings, like expensive jewelry or a significant piece of art? Don’t assume you’re already covered from theft or loss. Some particularly valuable items may need a special rider to have them covered.
- Are you covered for a sewage line back up? This is another item not covered by standard policies. But, you can purchase coverage for the repair of a sewage line on your property and the damaged caused by the backup.
- Does your policy cover losses from identify theft and “cyber insurance”? With the risk of identity theft growing and our increased dependence on tech devices, this is something you may want to add to your policy if not already covered.
There are likely many other events and questions that could impact your insurance coverage, so make a list of changes in your life, home, work/business, and assets since the last time you reviewed your coverage and give your insurer a call. Also consider visiting The Insurance Institute’s website to learn more about insurance in general and questions you should ask when reviewing or purchasing a homeowner’s policy. Then call your insurer.I hope this information is helpful and I always welcome your feedback.