Why Your Homeowners Insurance Needs a Periodic Review
When you’ve finished a remodeling project, you should always make sure that you review your homeowners insurance policy. You’ve spent hours and hours of intense effort and even a substantial investment on these home improvements. But unless your insurance covers these changes, you’re leaving yourself open to risk in the event of damage or disaster.
Your dwelling coverage needs review
The amount you pay as monthly premium on your home insurance policy includes a component which will cover the rebuilding of your home in case it is completely destroyed by an accident or natural disaster. As you make improvements or add new sections to your home, the cost of rebuilding it proportionately increases. Unless your home insurance coverage also is increased to match this growth, your policy will be inadequate for your needs.
Verify the rebuilding cost of your home from time to time and keep it up to date. This means you should periodically factor the value created through repairs, remodeling or extensions constructed to the building. Then your homeowners insurance must be proportionately updated to cover your home at the higher value. In the event of an accident which damages your dwelling, you can claim the correct amount of money from your insurance company that will allow you to rebuild the entire home.
At least once in a year or after you make any significant changes or modifications to your home, take time to review your homeowners insurance coverage. Take into account all the additional expense you incurred to make the new additions and improvements. Your dwelling coverage should be large enough to cover any damages that totally destroy your home. This means it is vitally important to periodically evaluate the impact of the changes on the overall nature of your home insurance cover.
While doing these revised estimates, if you feel that the current cost of replacing your home is higher than your dwelling coverage, then you should consider adding extra coverage to your home insurance policy. That is the only way you can have adequate cover to safeguard you against any serious damage or to compensate you for the cost of extensive repairs after an accident.
Your content coverage may also change
When you review your home insurance coverage, take the opportunity to also check on your content coverage. Dwelling coverage only insures the structure of your home or building, but does not include its contents. Because your personal property is also valuable, your homeowners insurance should also cover the contents of your home. Any additional premium that you will be charged for this cover is worth paying.
Since you first purchased homeowners insurance, you may have added new furniture, assets, ornaments, decorations or jewelry to your list of personal possessions. When you add up the cost and calculate how much it will cost to replace all the contents of your home in the event of theft or damage, you may discover that the amount has gone up as compared to earlier. If the new figure is in excess of the content coverage under your homeowners insurance policy, then you should increase the limit to ensure adequate coverage.
Save money while reducing premiums
As you perform a complete audit of your assets and their value, you should also take advantage of this exercise to identify areas of inefficiency and improve them. Maybe you’ve used the same electricity and cable provider, or been with the same heating company for several years. As technology evolves, you may have installed equipment that is old and out of date. The efficiency of such equipment may be so low that you will save money by replacing them. This makes it worth the time and effort you might have to take to achieve such a change.
When you do this and enhance the safety and efficiency of your home, you may become eligible for some discounts on your homeowners insurance policy. What appears, at first glance, to be adding costs to your home improvement may eventually end up putting more money back into your pocket through savings on utility bills and insurance premiums.
This will ensure adequate cover under your home insurance policy and give you greater peace of mind because you know your property and assets are protected and safe.