When You Should Review Your Homeowners Insurance Policy - Part 1

Homeowners insurance policies are documents that need to be reviewed annually and updated periodically. There are a variety of reasons for this review, and the only way to ensure you have proper coverage is to speak with your insurance agent.

If your agent doesn't call you, take it upon yourself to ensure that you have proper coverage. (If your agent does not contact you at least once every two years, you might want to consider getting quotes from one who does.) Unless your agent is a friend, it is highly unlikely he/she will know that you have a need for increased coverage.

There are a few reasons to have reviews of your insurance policy. First, you’re risking not having complete coverage if you have made any major changes that affect the value of the house. If you have a disaster, and find you’re under-insured, that is not the time to disagree about who was responsible for proper coverage. The responsibility always falls on the policyholder.

So, what are the exterior and structure changes you should report to your insurance agent?

The square footage of your home is what determines the coverage needed, so if you have added on to your house, it is imperative to let your agent know. Additionally, if you converted an attic to living space or finished a basement, these are other times to inform your agent of the need for additional coverage. For example, let’s look at a ranch-style home of 1800 square feet, with a full basement. Once the basement is completely finished into living area, you have just doubled the size of your house to 3600 square feet! Obviously, additional coverage will be necessary.

Check with your agent to determine if you need any changes to your policy to cover any new out buildings added to your property. These could include a pole barn, mini barn, pool house or garage.

Other exterior changes that should be discussed with your insurance agent are fences, in-ground or above-ground swimming pools.

Remodeling does not usually require additional coverage, such as new appliances, new carpet, etc. However, if you do extensive redesign, it’s best to verify you’re covered sufficiently.

Besides the possible need to increase your coverage, there are also updates that might help you qualify for credits, thus reducing your premium amount. These items, among others, are a new roof, furnace, electrical and plumbing.

A sprinkler system, smoke alarms or security alarms also might qualify you for a discount.

If in doubt about the need for additional coverage or possibly qualifying for credits or discounts, give your agent a call.