Many homeowners purchase their homeowners insurance policy when they first get their home, and then they do not think much about it while they keep paying the premiums. It is a good idea to take a step back and re-evaluate the policy every couple years to ensure you have the right amount of insurance for the following reasons.
Life Changes
Your insurance provider will determine how much your policy costs based on various risk factors. That is why you should contact your insurance provider when you have changes in your life that could potentially decrease the amount of risk that you have.
For example, if you recently had kids that moved out of the home, simply having less people in your household on a daily basis can make your home less of a risk in the eyes of an insurance provider. Other factors, such as getting older or getting married, can have a similar effect on risk.
Home Changes
Your initial home insurance policy was based on your home at the time that you had it. The insurance provider most likely used the home's appraisal as a basis, which factored the cost to repair your home at the time it was purchased.
Over the years, you may have made some major alterations to your home that your insurance provider can be aware of. This includes installing a new type of roof on the home, remodeling your kitchen, finishing your basement, or even adding an addition onto the home.
While not telling your insurance provider about these changes will keep your premiums low, it could also put you in a situation where there is not enough coverage in the policy to cover a total loss scenario. For example, if you have a house fire, the insurance policy may only have enough money to repair your home in its original form. There might not be enough money there to cover your new kitchen, and definitely not enough money to cover an addition. You will end up not restoring your home to the way it was before the fire.
Asset Changes
You may have acquired some high-value assets over the years that should be added to a personal property rider. This could include jewelry, artwork, furs, firearms, or anything that is unusually high in value. There could be limits to your existing policy that you're not aware of, simply because it never came up at the time you bought the policy.
For more information about re-evaluating your homeowners policy, reach out to local insurance services.
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