Home Insurance Articles
When To Add New Coverage For Existing Home Insurance Policies
2010-08-10
When it comes to buying home insurance, quite a few homeowners buy the policy, stash it in a drawer, pay the premiums, and never think about it. You should have a clear idea of what exactly you're covered for under your policy and what you're not. You might be very surprised to find out what the policy will not protect. While there's no need to fiddle with buying new coverage every ten minutes, there is a place for regular reassessment of your insurance needs to determine whether to increase coverage, add coverage, or change the type of coverage you've bought.
Once a year is a reasonable interval to dig out the policy and reexamine your coverage. In general, you'll want to have more coverage the more possessions and assets you've accumulated. If you don't already have it, buying full replacement value insurance is a good idea if you've got a lot more stuff than when you bought the house. For this you'll need receipts for their purchase, and digital pictures or even a video, to document what you've added to your personal inventory. If you've bought new furniture, or built a gazebo in the backyard, or installed a spa, you're of course going to want to make sure these upgrades are covered. If you've remodeled the kitchen, that's also an increase in your net worth you're going to want to protect. If you've upgraded your home electronics, or bought new computers or upgraded your old ones, they need to be attached to your policy. If you've added electronics to the car (DVD players in the minivan, say, or a GPS in the sedan), they will be covered under your homeowners plan and need to be added to your policy.
While basic homeowner's protects against some natural disasters, no out-of-the-box policy will pay for flood damage. If you're living in a hurricane-prone coastal area you might already have bought hurricane insurance, but even those policies regularly exclude flood damage. Separate flood insurance is a must, because even if you're nowhere near any body of water, you still have a 25% chance of experiencing a flood. Just let the sewer back up badly one time and you'll wish you had it. Earthquake insurance is likewise something that needs to be purchased separately, but in seismically active areas it's indispensable.
There are other things to insure against-if you run a home business, a loss-of-use insurance rider will help with relocating. If you add a pool you should buy increased liability insurance. And so on. You should talk to your insurance agent about what adequate coverage means for you at this moment. Home insurance is your backup, and new coverage when needed is the backup to the backup.