When your home insurance policy comes up for renewal, it is a great opportunity to review your coverage and reassess whether your policy makes financial sense.
Many homeowners get their insurance and forget about it. They assume their insurance will cover the costs if something goes wrong.
However, insurance policies can be very different from one another. Too often, homeowners cut their coverage in favor of lower premiums. They can save money in the short term, but when a loss occurs, they may discover that their policy does not cover everything that they thought it would.
In some cases, insurance companies may not offer a settlement that lives up to your policy. When this happens, it makes sense to contact an insurance lawyer like Virani Law to review your claim and negotiate with the insurance company. That said, an insurance lawyer can only help you get what you are entitled to in your insurance policy.
The next time your policy comes up for renewal, this is what you should review.
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#1 Has Your Insurance Kept Up with Construction Costs?A major part of your insurance policy is the cost to repair or rebuild your home after a fire. Most policies will have inflation protection, where your coverage rises with the cost of inflation, as do your premiums.
Unfortunately, residential construction costs have risen much faster than inflation. Supply shortages for construction materials, labor shortages for contractors, and high demand all around have raised the costs that you can face. The cost to rebuild your home could be substantially higher today than when you got your insurance policy.
The best way to check if you have enough coverage is to look for information about building costs in your area. If you can, get a quote from a local builder on the cost per square foot to build a home in your neighborhood.
#2 Check Your Contents CoverageOver time, people tend to accumulate more belongings in their homes. They buy new electronics, update their wardrobes, redecorate with new furniture, and more. With time, people naturally accumulate more things, and they don't always get rid of the old ones. According to one surprising statistic, there are over 300,000 individual items in the average home. With home sizes on the rise, there is more and more room for our belongings, and you can quickly forget about everything that you own.
Buying new belongings can leave your insurance policy out-of-date. If you are not sure whether your home insurance policy will cover everything, make sure you check the coverage limit. Often, there are special limits which apply to certain belongings, such as valuables like jewellery, furs, or fine art. You will find details about these special limits in your insurance policy. Then, create a home inventory with an estimate of what all of your belongings might be worth.
A home inventory is a great way to quickly check whether or not you have enough insurance coverage. In addition, a home inventory is a great way to know what you have. You can quickly check it whenever you need to get a new home insurance quote, and should a loss ever occur, you can save yourself a lot of stress remembering what you had.
#3 Compare Local Rents to Your Additional Living Expenses CoverageAdditional Living Expenses coverage is essential when you cannot stay in your home after a fire or flood. Smoke and fire damage can make your home unlivable until repairs are made, and that process can take months, if not years. In the meantime, you need to pay to live somewhere else. Usually, families will rent a hotel or motel for several days or weeks in the immediate aftermath of a fire and then move into a rental home or condo.
You may want to see what your coverage limits are and how they compare to rents in your area. Average rent prices have gone up everywhere, not just in major cities. You should be able to maintain your standard of living with the help of your insurance policy.
#4 Tell the Insurer About RenovationsWhen you are adding an extension, buying all new appliances and fixtures for the kitchen or bathroom, or replacing your flooring, you should tell your insurer about it. Unreported renovations can quickly land you in trouble with your insurance company. When you renovate, you increase the cost of replacing those building materials.
The insurance company is not going to pay to repair renovations that they did not know about. Before you bring in a contractor, make sure you talk to your insurance company about covering the improvements.
On the bright side, some renovations can reduce your premiums, such as getting your roof replaced.
Evaluating your home fire insurance policy will give you peace of mind, knowing that your policy has your back when you need it.
