Home Insurance Articles

How To Modify Existing Home Insurance Coverage

2010-07-22

Many times, a homeowner needs to modify existing coverage to increase policy limits or expand types of coverage because of a change in circumstances. As a family grows and begins to own more personal property, the limits on property damage in the existing policy may not be sufficient. If a new home-based business is started, liability limits for third-party injuries may need to be increased. After additions or renovations are made to the home, the maximum pay-out for damage to the property may not cover the property's increased value. Changes in circumstances such as these quite often form the rationale for modifying existing coverage, but will generally also mean that higher premiums will be charged.

On the other hand, there can be equally valid reasons, under certain circumstances, for decreasing existing coverage. A decrease in the property's value may mean that higher levels of coverage are no longer needed. A loss of a major source of income may demand cost savings whenever feasible, such as increasing policy deductibles or elimination of personal property coverage. Adult children leaving home may mean that liability and personal property limits can be lowered. Just as with the increased costs that come along with increased coverage, modifying existing coverage downward also has its perils. When coverage levels are lowered, the homeowner increases his or her personal financial exposure if the home is damaged or someone sues for being injured on the property.

Modifications to home insurance coverage can be accomplished in several ways. First, a homeowner can seek modifications to the existing policy with his or her current insurer. If the insurer will not modify the policy itself, it still may be willing to add a rider to the existing policy that accomplishes the same end result. Second, a homeowner can always look to other insurers for a new policy with the modified coverage levels. Home insurance quotes are readily available from a number of sources, including agents, brokers and online marketplaces. Finally, a supplemental policy, backed by the government, may be necessary for coverage against certain types of losses that no private company will insure, such as flood damage.