When to Review Your Homeowners’ Insurance
February 22, 2024Reviewing and shopping for insurance may not be on your bucket list of fun activities, but it is an important practice to ensure your coverage is up to date and pricing is fair. There can be a lot of value in sticking with an insurance company you trust and there can be benefits or loyalty discounts for doing so. Even so, there are times when it makes sense to review your homeowners’’ insurance policy with your agent and possibly shop around to get a sense of the current marketplace. Whether you’re sticking with your current insurance carrier or getting new quotes, here’s when to review your homeowners’ insurance:
1. Before Your Renewal Date
At the very least, you should review your homeowners’ insurance policy once a year. Since home insurance policies usually last for about a year, you can align annual reviews with your policy renewal date. Usually, your insurer will send your updated policy declarations 45-60 days prior to the renewal date. Provided there have been no issues, your policy may be set to auto-renew provided you submit your payment on time.
Even if you want to continue with your current insurer and policy, it’s still a good idea to review your policy to make sure you know what your homeowner’s insurance covers and does not cover. Also, make sure you review your current limits and make sure they are still providing the coverage you need including accounting for any changes in your life, home, property inflation, etc. Your insurance policy DEC page will outline your current coverage, limits, etc., and is a good place to start when reviewing your homeowners’ insurance.
2. After Purchasing or Receiving Valuables
Unless you are in the habit of maintaining a personal property inventory list, reviewing your homeowners’ insurance may not be top-of-mind after you purchase or receive valuables. However, it’s important to not only make sure these high-value items are added to your home inventory list, but also to update your insurance coverage or add endorsements if needed to ensure those items are insured properly.
Policy limits on a standard homeowners’ policy may or may not cover certain types of personal property. When reviewing coverage, you want to make sure your property is covered either by the standard policy, by itemizing or scheduling specific valuables, or through required endorsements.
You also want to check how loss of personal property items will be covered. The two primary options on a homeowners’ policy are actual cash value (ACV) or replacement cost value (RCV) coverage. An ACV settlement provides a payment for the personal property based on today’s actual cash value, which may not necessarily be what that item would cost to replace.
If your policy provides a replacement cost settlement for personal property, the amount paid will reflect the current fair market value to purchase a replacement item of similar type or kind. This difference in claim settlement is why replacement cost for the dwelling, replacement cost for contents, and other policy add-ons are important coverages for homeowners’ policies.
3. After Home Updates and Improvements
Renovations, additions, or outdoor living space updates are all types of home changes that can affect homeowners’ insurance. In addition to affecting the value of your home, these changes can also make your current insurance policy coverages and limits outdated or insufficient.
Interior Renovations or Additions
If you are remodeling the interior of your home or adding an addition to your living space, these changes increase the replacement cost of the dwelling (Coverage A). If a loss were to occur impacting these upgraded spaces, you want to make sure your policy limits are sufficient to fully cover the cost to repair or rebuild them. These are factors that affect homeowners’ insurance rates and they are important to consider before the need for a claim arises.
You also want to review your homeowners’ insurance with your agent after you have made home updates or renovations that increase the safety of your home or reduce risk. Depending on the insurer and the nature of the changes, you may qualify for a discount because you are proactively reducing risk, covering liability, protecting your home, etc. This can be one of the extra benefits of home monitoring systems.
Outdoor Additions
If you are adding an outbuilding to your property, there may be changes you have to consider for insuring outbuildings at your primary residence. Proper coverage depends on the size and type of outbuilding, intended use, and more.
Even changes to your backyard could mean changes to your homeowners’ insurance policy, especially if any backyard structures you are adding could be considered attractive nuisances. Swimming pools, playsets, trampolines, and more are backyard liabilities that could also be attractive nuisances.
How these are defined and the details of how attractive nuisance and homeowners’ insurance are handled can vary depending on the insurer. You will want to be aware of that information as well as any recommendations to reduce the risk for those liabilities before it’s time for your policy to renew.
4. If Who is Living in the House Changes
Another good time to review homeowners’ insurance is if there are any changes to your family and who is living in the house. Marriages, divorces, births, adoptions, deaths, people moving out, people moving in, etc. can all potentially affect homeowners’ insurance. Who needs to be listed as an “insured” on your policy, any updates to coverage that are needed, and more are all home insurance considerations for multigenerational households.
5. If You Are Renting Your Property
Also, if you have started renting out any portion of your home or property, you will need to review your homeowners’ insurance. Depending on the situation, you may need to consider landlord insurance or require that your tenants purchase renters insurance.
You may even need to acquire a business insurance policy depending on the details of the situation. It’s best to notify your insurance agent of these upcoming changes and have a conversation to ensure that you and your property are properly insured.
6. When Adding a New Pet
There is a lot of variation when it comes to homeowners’ insurance and pets. Depending on the pet, you may not need to add anything to your current policy to maintain comprehensive coverage. Or, there may be specific considerations that you will want to review with your insurance agent.
When it comes to pets, one of the most common questions is “Does homeowners’ insurance cover dogs?” It depends on a variety of factors and varies based on the insurer. Dogs and other pets can add new risks and liability exposures; it’s worth a conversation with your agent to make sure you understand what is and isn’t covered and whether you need to increase liability limits or add new coverage for certain situations.
Get the Homeowners’ Insurance You Need With Ruhl Insurance
Just as there are times you should consider shopping for car insurance, there are also times you should review and consider shopping for homeowners’ insurance. These situations don’t cover everything, but they provide a good timeline for when to review your homeowners’ insurance.
Anytime you need to review coverage or even think you need to update or change coverage, a conversation with your insurance agent is a good place to start. If you have questions about your insurance coverage, contact Ruhl Insurance at 717-665-2283 or 800-537-6880.
Disclaimer: Information and claims presented in this content are meant for informative, illustrative purposes and should not be considered legally binding.