Most people only think about their homeowner's insurance once a year when the policy renews, or if they have a claim. But your life changes almost every day, and you need an insurance program that can change with you. Here are a few things to think about when purchasing homeowner's insurance.
Is a Home Remodel Project in Your Future?
You may be looking for ways to improve your home shortly. Perhaps you want to upgrade your heating system, replace a leaky roof, or add on that sunroom you have always wanted. Before you get started, however, you will want to know how that remodeling project can affect your insurance needs.
Whether you are updating your kitchen or adding on another room, a remodeling project will likely add value to your home. As a result, you will want to check the property coverage limits on your homeowner's policy to make sure that they reflect any changes you make to your home, no matter how small or large the improvements may be.
If you hire someone to do the remodeling, you will want to make sure that he or she is adequately insured. Any contractor that you hire should have a certificate of coverage for both workers' compensation and contractor's liability insurance.
Always Use Replacement Value (RC)
Replacement Value will repair or replace with like-kind and quality up to the policy limit. That is why your policy should have coverage for the cost to fully reconstruct your home with like kind and quality.
Rebuilding is different from buying. The cost to buy a home is different from the cost to rebuild, so you cannot rely on your home's market value to set your insurance limits. An appropriate amount of insurance coverage will permit you to rebuild your home in the event of a total loss. That replacement value depends on the physical characteristics of your home, as well as the price of labor and materials in your area. In most areas, these costs increase with time.
Create An Inventory Of Personal Property
Developing a home inventory is recommended by all insurers. A home inventory is the best way to account for all your personal property. Most people under-estimate the value of their personal property after a loss. Your homeowner's insurance is designed to provide replacement cost (if purchased) in the event of a loss, so knowing the full value of your property puts you at an advantage.
The KnowYourStuff app is the official home inventory application (app) of the Insurance Information Institute. A home inventory can save time, money, and peace of mind, and can help you get the most value from your insurance in the event of a fire or other loss. This app also enables you to understand the value of your personal property. "Need to see your stuff at a glance? The user-friendly dashboard has charts, tables, and graphs that show the total value of your belongings by property, room, and collection." (knowyourstuff.org).
Your homeowner's insurance is an important financial tool to help you manage your assets. Why not make sure you take full advantage of your coverage by having a comprehensive list of your personal property and an up to date replacement value.
Buying Homeowners Insurance--The Right Way
1. Use an independent agent. We will search the market for the best coverage value for you. Do you know that some insurers don't like older homes, while others do? Do you also know that some insurers give certain discounts that others don't? We know how to give you the best value.
2. Read your policy. It is important that you know what your policy covers. We can certainly answer any questions you have, but it pays to review your coverage.
3. Talk to us about your coverage needs. You may travel frequently, have many toys like ATV or boats, or you may have expensive jewelry; all these lifestyle choices need to be considered when selecting homeowners' insurance.
4. Have you completed any home improvement projects? Did you add a bathroom, enlarge your deck, or add a media room? Home improvement projects may require an update to your policy.
5. Often adding other coverage like auto, boat, or RV to combine coverage will gain a better cost advantage.
6. Having a home security system or home sprinkler system often will help lower premiums.
We all want to save money, especially on our home insurance. However, you must know how to get a reasonable rate without compromising on coverage. By talking to us and discussing the coverages needed for your home, you will be able to receive the best possible combination of coverage, price, and service.
A Few Final Thoughts
- Have us complete a review of your homeowner's insurance. We can identify gaps in coverage.
- Develop a home inventory. A complete home inventory benefits homeowners and insurers by supplying both parties with the tools to make better, more informed insurance decisions.
- Store your homeowner's policy in a safe place, where it won't get damaged.
- Keep your important family documents in a locked fireproof box.
- Take a video of your home, inside and out, including all your personal property.
- Once damage occurs, use the video to confirm the damage.
- You have the right to hire a contractor to make emergency repairs to prevent further damage.