Review Your Home Insurance Policy Today: 5 Things to Check
Insurance experts recommend reviewing your home insurance policy annually. If you are reading this article now, it is a perfect time to reach out to a Public Adjuster and have them do a comprehensive policy review for you. Unfortunately, most Insurance Agents have no idea of the actual policy language. They can see that they are giving you coverage for a specific dollar amount, but they don’t know if the language in your policy excludes coverage for things that should be covered.
But what should you check on your home insurance policy? What coverages are must-have – and which ones are skippable? How do you ensure you’re still paying a competitive price?
Keep reading to find out exactly what to check when reviewing your home insurance policy.
Review Your Home Value & Limits
First and most importantly, you need to review your home insurance policy to ensure it provides the coverage you need.
Only 30% of homeowners understand their home insurance coverage limits.
Many of these homeowners don’t realize they’re underinsured until after a major claim – when it’s too late.
Consider how much it would cost to rebuild your house if it burned down during a fire. That cost should accurately reflect the cost of materials and labor – especially since both costs have risen significantly in the last few years.
If your house burned down today, how much money would you receive? Would this amount of money be enough to rebuild your home? Adjust your homeowners insurance policy accordingly.
Consider Any Renovations or Improvements You Made to Your Home
Have you improved your home in the last year? Have you completed major or minor renovations?
If you’ve improved your home, then the cost of rebuilding your home just increased – which means your homeowners insurance policy may need to go up as well.
Review your coverage limits to ensure they match the value you added to your home. Most insurance policies have wording that requires you to inform them if you make changes to your home that would increase the value.
Review Flood Insurance
Severe weather events are becoming more common. You may need to add flood insurance to address this risk.
Did a recent storm cause flood waters to rise frighteningly close to your home? If so, you need to make sure that the designated flood zones haven’t been updated to include your area.
Have hurricanes and storm surges caused water damage to your property? Hopefully, you had a flood policy. Even if you are not in a flood zone, it is important, and inexpensive, to insure your home if you are not in a flood zone. It only takes about 1” of water in your home to create catastrophic damage.
A standard home insurance policy does not cover flood damage. If your property is damaged or destroyed by rising floodwaters, then you could receive little to no compensation without flood insurance.
Consider adding flood insurance to cover the increased risk of flood damage.
Check Your Home Inventory List
Have you purchased any expensive items in the last year? Does your homeowners insurance provide adequate coverage for all the possessions in your home?
As part of your annual insurance review, check your home inventory list and compare it to your insurance coverage.
Your insurance policy should have adequate coverage to replace any items in your home – including low-value and high-value items.
Maybe you bought some new toys in the last year. Maybe your limits are too low. Whatever the case may be, it’s important to check your home inventory list and compare it to your home insurance policy coverage to verify you have sufficient coverage.
It is always important to document your home yearly, room by room, with a video or photos that include model and serial numbers. If a fire, tornado or hurricane takes place, documenting your personal property would be almost impossible without prior proof that you owned the items. Sometimes damage is so catastrophic that there is nothing left to prove what you owned.
Check for Exclusions
Many homeowners don’t understand policy exclusions. That’s a big problem, because it could prevent you from being paid after a claim.
Check your policy for exclusions and make sure you understand exactly what those exclusions are. Common exclusions are:
- Flood damage
- Earthquake damage
- Maintenance-related damage
- Pest damage
- Mold
- Damage to home-based businesses
- Wind driven rain
A standard homeowners insurance policy will not cover any of these damages. They’re common exclusions. Review your coverage to ensure you have adequate protection.
Add Endorsements, If Necessary
Homeowners insurance doesn’t automatically cover all items in your home. If you have a $5,000 engagement ring, for example, then that item may not be covered.
Instead, you need to add endorsements to your home insurance policy to ensure high-value items are covered. Endorsements can cover computers, electronics equipment, jewelry, and other high-value items.
A standard home insurance policy may limit compensation to $500 per item without an endorsement. Without an endorsement, you might receive just a fraction of the value of certain items in your home.
- Review your coverage to verify you have the right endorsements.
- Review the risk of flood damage impacting your home, then decide if you need flood insurance.
Check If You Can Combine Multiple Coverages
You may have multiple insurance policies with different companies. You could have pet insurance and a special insurance policy for your jewelry, for example, in addition to your ordinary homeowners insurance policy.
Today, many homeowners insurance companies offer all of this coverage and more under a single roof. You can add pet insurance and a jewelry endorsement to your homeowners insurance policy, for example, to save money and minimize hassle. Check with your insurer to see if you can combine multiple policies together.
Get Quotes from Other Home Insurance Companies
Your insurance company may have charged the best prices on home insurance five years ago.
However, a lot can change, which is why you need to check home insurance quotes regularly to ensure you’re paying a fair price for coverage.
New competitors rise and fall. Insurers introduce unique new coverages, bundles, perks, or discounts that could make one insurer a significantly better option.
Fortunately, it’s easy to compare home insurance quotes online with no obligation. You can easily compare prices among insurers in your area with a few clicks.
Don’t be afraid to switch providers: people switch homeowners insurance providers regularly for better deals. Switching could save you thousands of dollars.
Review Your Home’s Condition and Complete Maintenance Tasks
Your home insurance contract isn’t a one-sided deal: it’s a two-sided agreement. Your insurer agrees to cover the cost of repairing your home after a disaster but only if you also maintain your home and keep up with repairs.
Review your home’s condition and schedule maintenance tasks as part of your annual insurance review.
Small items ignored today could turn into big problems in the future. A small crack in your shingles may not seem like a big deal, for example, but it could jeopardize a future insurance claim.
If an insurer finds your property was already damaged before a storm, then they could pay you significantly less for your insurance claim. There was pre-existing damage, and this pre-existing damage may have worsened the storm damage, so your insurer can pay you less.
Ultimately, reviewing your home’s condition and maintenance tasks annually can help you ensure smooth insurance claims in the future.
Final Word on Reviewing Home Insurance Policies
Review your homeowners insurance policy at the beginning of each year to determine if you have enough coverage. If you don’t fully understand your policy, reach out to a Public Adjuster for a policy review so that you know exactly what coverages you have and where you might be lacking the correct coverage.
Being underinsured can cause you to miss out on hundreds of thousands of dollars of compensation from a single incident. It could change your financial future.
Spend a few minutes reviewing your home insurance policy to ensure you have adequate coverage.
Stephanie is a property insurance claim expert with over 20 years of experience working as an insurance adjuster, expert witness, appraiser and umpire. She is passionate about sharing her expertise, knowledge, tips and training to help both property owners and Public Adjusters in their pursuit of effectively managing claims and recovering the claim settlement they deserve after a loss.
