Investment propertyLife Changes, Home Improvements Should Prompt Review Of Your Homeowners Insurance
If you"ve recently gotten married or divorced, have improved your kitchen, or made your home safer, then the insurance industry says you should review your homeowners policy. You might be eligible for lower premiums, or you may need to increase your coverage so you"re not underinsured.
The start of the new year is a good time to reexamine your coverage, according to California Insurance Commissioner John Garamendi. The state was hit hard by the Southern California firestorms, which devastated some 3,600 homes. The resulting mudslides in the San Bernardino area and the San Simeon earthquake also caused insurance nightmares for many.
"Financial trauma can be reduced or even eliminated if we all just take the time to update our homeowners policies ..." he said.
As many as one-third of the victims of the Southern California fire victims didn"t have homeowners insurance; another one-third was underinsured, The Kansas City Star reported on Dec. 25, 2003.
Laman and Carmen Sadler, 73 and 69, had insurance, but not enough to replace the two-bedroom house where they had lived for 27 years.
"Our homes, our modes of transportation, our jobs, and our entire lives are constantly changing," Garamendi said. "Our insurance coverages need to keep
pace -- otherwise the next crisis you face could have a much more harmful impact on your life and the lives of your loved ones."
The Insurance Information Institute (III) says there are four major events that should trigger a review of your policy. They are:
When it"s time to renew your policy. Shop around for cheaper rates from other companies. Think about raising your deductible to save money. Also, contact your agent to ask the following questions:
Has the company made any changes to your policy?
Does your policy include a separate deductible for risks like hurricane or hail?
Are there any discounts you can take advantage of?
Do you need to raise the amount of coverage for liability, personal possessions or the structure?
Should you have a flood, earthquake, or umbrella policy?
When you make a major purchase or improve your house. If you have an expensive new item, like a piece of jewelry or artwork, or a computer, the III says you should talk to your agent about increasing your coverage or purchasing a floater/endorsement, which gives you higher and broader coverage than your normal homeowners policy.
If you add a new room, enclose a porch, or remodel your kitchen or bathroom, you should report any increase in square footage so you don"t risk being underinsured. And do the same for structures on your property that aren"t attached to your home -- gazebos, sheds, pools, or hot tubs.
When you"ve made your home safer. You might qualify for a discount if you install a new fire/burglar alarm system or have upgraded your heating, plumbing or electrical system.
Major lifestyle changes. Getting married, divorced, kids going off to college, or coming back home after college, can all prompt homeowners insurance changes once possessions are moved in or out.
Once you make changes, keep your policy paperwork in a safe place, preferably a safe deposit box. You should also take an inventory of all your possessions. Making a videotape is a good way to document your belongings.