To many people, the new year presents an opportunity to change for the better. If you own a home, the new year can also be a great time to have an annual insurance review and maximize protection for your family’s house and properties. Not having the right policy in place may leave you underinsured or paying for protection you don’t need, for years.
The Importance of a New Year’s Insurance Review
A New Year’s insurance audit is your chance to scrutinize your homeowners insurance policy and update any changes or enhancements that may have taken place during the past 12 months. The exercise is fairly painless, especially when compared to the possible benefits. A once-per-year review can save you a lot of money now and financial distress down the road if the unfortunate happens.
Here are some of the changes you’ll want to watch out for as they might create a coverage gap in your policy:
Change in Your Home Replacement Value
If it cost $250,000 to build your home 10 years ago, you may be surprised to learn that the amount most likely would not be enough to replace your home today if you lost it in a covered hazard like a fire. Home values increase with time, and it may now take $350,000 or more to rebuild the same property. If your policy isn’t up to date, it can’t protect you for the full replacement value of your home.
Home Renovation or Upgrade
Renovating or upgrading your home may introduce different assets and liabilities that require updating your policy. New structures, whether interior or exterior, add value to your home. Kitchen upgrades, new equipment, and other home improvements warrant an insurance review to ensure that you’re not underinsured for the coming year.
New Year’s Insurance Review Tips
Auditing your homeowners insurance policy can be a hassle-free exercise with the guidance of a knowledgeable insurance agent. The expert can help you identify features that you need to include in your policy update to maximize protection.
As you conduct your new year’s insurance review with your agent, here are some key areas that may warrant your attention.
1. Changes in Construction/Replacement Costs
During your new year’s insurance audit, it’s important to document any changes that may affect your home’s construction costs, including:
- Interior renovations/upgrades in spaces like the kitchen or bathroom
- Newly finished basement
- New appliances
- Custom or semi-custom finishes
- Electrical systems
- Plumbing systems
2. Finished Basement Water Damage Risk
Did you recently spruce up your basement with fresh insulation, a new carpet, furniture, or drywall? If yes, you may want to assess the need for extra protection from water damage. Many standard homeowners insurance policies do not cover flood and other water damage. You may benefit from additional coverage in the event of basement water leakage due to a faulty sump pump, for instance.
3. Outdoor Equipment or Features
Such additions can increase your home’s replacement cost. They may include:
- Backyard grill
- Swimming pool
- Lawn care equipment
- Detached structures, such as a new garage
4. New Valuables
Your standard homeowners insurance policy doesn’t cover certain expensive possessions or valuables. You may need extended coverage for new acquisitions like:
- High-end artwork
- Valuable sports equipment
- Home office equipment
An annual insurance review may reveal home improvements/installations that warrant a discount on your premiums. Examples include:
- Home security system
- Fire detection system
- A reinforced hail-resistant roof
This New Year, when you make your resolutions, don’t forget to add an annual insurance review to fix coverage gaps and do away with any unnecessary costs. If you are looking for reliable and affordable coverage, don’t hesitate to contact us at Sausman Insurance Agency in Mifflintown and Millersburg, Pennsylvania. We are ready to assist you with all your coverage needs.