8 Reasons to Update Your Homeowners Insurance

Based upon an article by Allison Bisbey Colter, that first appeared on Relocation.com, this post gives you some good reasons to check your homeowners policy and perhaps make an appointment to get an update review of your coverages. While you’re at it you might as well get some comparative prices for the updated coverage, so be sure to call Eric Chase of InsuranceOne at (248)263-0080 and get his quote on what you need. You’ll be glad you did.

Your home is probably your biggest investment, so once a year you should review your coverage to see if you're adequately protected. Here are some reasons you might need to tweak your policy.

1. You've made your place safer.

Insurance companies extend credits for alarms, sprinklers and other safety devices. Just ask. Just adding carbon monoxide detectors or fire extinguishers to your home may qualify you for a discount.

2. Rebuilding costs are going up.

The market value of your home, which includes the land, and its replacement value aren't the same. When you're insuring, you're covering the house, not the land, so don't over insure. However, the cost of rebuilding usually increases year to year, so review your coverage occasionally, especially if your latest remodeling projects significantly increased the value of spaces like your kitchen or added living space to the house.

3. You've got more stuff.

The amount of stuff you own, and need insurance coverage for, will vary over the years. Do a home inventory occasionally to value the goods in your home, and adjust your insurance coverage appropriately. While you’re at it, make sure that you take photographs of your more expensive items, so that you have more than just sales receipts to document their replacement value.

4. You've remodeled.

"Something as simple as a bathroom remodel can impact your home value and should be discussed with your agent," says Madelyn H. Flannagan, vice president for education and research at the Independent Insurance Agents and Brokers of America. Putting $30-40-50,000 or more into a kitchen remodeling project and then not protecting that investment with the proper level of insurance is just foolhardy.

5. You work at home.

If you're running a business from home, you could have limited or no coverage under your home policy. If something happens to the house, what would you use to replace the business equipment that was lost?

6. You've bought some expensive items.

If you have an extensive collection of jewelry or artwork, you may need additional coverage. Even if it’s not extensive; would you want to just be “out” for the cost of your artwork, jewelry, furs or other valuables if disaster struck. You really have to be able to prove (and have insurance for) the value of that expensive painting over the sofa, unless it was a $19 special by a starving artist.

7. You want to protect your liability.

Homeowners insurance also covers you against lawsuits for bodily injury or property damage to your family or other people visiting your home. Most standard home and renters insurance policies provide at least $100,000 of liability coverage. However, there is additional protection that you might want to consider adding if you have more assets to protect. Let’s face it, $100,000 won’t even cover you for spilling a cup of hot coffee in someone’s lap these days (just ask McDonalds) and any slip and fall lawyer worth his salt will get twice that much just for taking the case against you.

8. You live in an older home.

Standard homeowner's polices won't cover you for damage from sewer or drain back-up or other mishaps that you might experience in an older home. Check with your insurer about other types of insurance coverage you might need. Also check to see that lots of things that you think you are covered against don’t have exemptions if you live in an old home, especially one that has not had it’s plumbing and electrical systems updated. You’ll blow a fuse if your old fuse box shorts out and starts a fire that isn’t covered.

Now I know that taking time to check your insurance coverages, and maybe talking to an insurance agent, ranks right up there with calling your doctor to schedule your bi-annual colonoscopy, but both need to be done if you re to remain healthy, bodily and financially, so just do it. Neither one is as bad as you imagine while you are putting them off.