Updating your insurance policy is not an enviable task. It can take a bit of accounting, inventorying, and research to do it right. But the New Year is a good time to tackle those big, necessary tasks, reviewing your insurance is a very worthwhile task to handle.
You depend on your policy to cover the costs of replacing lost belongings and repairing damage to your home. If your policy turns out to be insufficient, you will wind up having to pay out-of-pocket after an emergency. To make sure your insurance provides enough coverage in case something happens, follow these tips for updating your policy.
Create a Home Inventory
One of the most important content insurance claims tips you can follow right now is creating a home inventory, which is a list of:
- Your family’s personal belongings on the property;
- Receipts or other records of their financial value;
- Records of their condition.
All of these factors are important to insurance adjusters when you make a claim. When you have an up-to-date inventory already, you can save yourself hours of time and stress.
Get More than Minimum Coverage
A big mistake that cost-conscious consumers will make is getting the absolute minimum coverage allowed by their insurer. They look at their insurance premiums and want to save every dollar they can each month, so they opt for less insurance than they should. Often that means their policy won’t cover the full cost of repairs or replacing their belongings.
It’s understandable that homeowners want to save. The average cost of home insurance is $104 per month, or $1250 per year, in some places. As tempting as it can be, getting minimum coverage will prove more costly if something actually happens, and the difference can be enough to put you in serious financial trouble.
You don’t need to overpay for insurance, but you should make sure that you’re not under-insured. The best way to get appropriate coverage is to do the research yourself. Create a home inventory that will give you an idea of the value of your personal belongings. If you can, ask around to find out about building costs in your neighborhood. That can give you an idea of how much a total rebuild might cost.
Consider Weather-Proof Renovations
You’ve reviewed your coverage, and you need to raise your premiums. Meanwhile, the insurance company is also raising rates just for your coverage to stay the same. One of the biggest factors in rising insurance premiums is the increasing severity of the weather. It can start to feel expensive, but there are smarter ways to save money than reducing your coverage.
Some renovations will actually help you reduce your rates. Renovations that protect your home include:
- Installing a sewer backup valve and sump pump;
- Renovate your plumbing system;
- Fix your roof;
- Reduce liability by installing an alarm system or a fence around your pool.
Research Local Construction Costs
Coverage for structural damage is one of the most expensive parts of your policy and one of the hardest to pay for if you’re underinsured. If you’ve been living in your home for a while, construction costs have likely changed, and that’s what your insurance pays for. Construction costs have increased considerably faster than inflation. It’s important to ensure your structural coverage reflects this increase.
These four tips will help you re-evaluate your insurance policy this New Year. Make sure you have coverage that keeps you protected!