An annual review helps ensure your coverage reflects current needs.

When was the last time you reviewed your homeowners insurance policy? If it’s been more than a year, it’s time to make sure your policy provides coverage that aligns with your current needs. Additionally, an insurance review helps ensure you’re not overpaying. When you evaluate your policy, keep the following six things in mind.

1.) Life changes

A key element of homeowners insurance is personal property coverage. If your household grew due to getting married and combining households, or having a baby, it’s not unusual to have more personal property. Alternatively, if your household size is smaller, there may be less. Review your personal property limits to ensure the coverage matches your current situation.

2.) Structural changes to your home

Any time there are substantial changes to your home, it’s important to update your insurance policy. This includes things like additions; major overhauls of the plumbing, electrical or HVAC systems; remodeling with premium materials; expanding the floorplan; and adding outdoor structures such as a garage, shed, pool, hot tub or fence. Homeowners may find themselves underinsured if they don’t notify their insurer of changes that increase the value of the home.

3.) Things that help lower homeowners insurance premiums

Adding safety features like a security or sprinkler system works in your favor because it reduces the risk of property loss. If you’ve made enhancements that protect your home, ask if there’s a discount on your homeowners insurance.

4.) The way you use your home

Insurers are interested in how you use your home to the extent that it affects their risk exposure. For example, running a business out of your home where clients visit, using the home as a short-term rental or only occupying the home part-time changes the risk calculation.

Inform your insurer if the way you use your home has changed since the current policy was issued.

5.) Current costs for building labor and materials

One reason some homeowners find themselves with too little coverage when their home is damaged is because their insured value hasn’t kept up with market rates for rebuilding. Additionally, inflation contributes to inadequate coverage. Review your policy to make sure limits for rebuilding align with current market rates for labor and materials.

6.) Comparison shop for homeowners coverage

After reviewing your homeowners insurance and updating your current insurer, they’ll provide a new premium amount. Even if the premium seems reasonable, it’s always a good idea to compare three to five insurers. Premiums vary considerably, and shopping around can help you save money.

Also, keep in mind that as a Consumers member, you’re eligible for a discount when you get your insurance through Nulty Insurance.

 

Federally insured by NCUA