Spring may be the time of year for cleaning, but it is also a great time to review your insurance coverage. As your life changes, so do your insurance needs, says the Insurance Information Institute (I.I.I.). Instead of dusting around the corners of your insurance policies this year, take the time to ask yourself the following:
1. Is my home covered for its full rebuilding cost?
Review your policy to make sure that you have enough insurance to rebuild your home. If you have made major improvements to your home, such as adding a new room, enclosing a porch or expanding a kitchen or bathroom, you risk being underinsured if you don’t adjust your homeowners insurance coverage limits.
And if you don’t yet have a separate flood insurance policy, now would be a great time to check whether your home is in a flood risk zone at FloodSmart.gov.
2. Do I have enough coverage for expensive items?
Have you bought or received any valuable jewelry since you purchased/renewed your policy? When was the last time you had the items you owned appraised? Standard homeowners insurance has dollar limits for the theft of certain types of expensive items like jewelry, furs and silverware. This means that the insurer will only pay the amount specified in the policy – generally $1,000 to $2,000. To insure these items to their full dollar value, consider a special personal property endorsement or floater. This coverage includes “accidental disappearance,” meaning coverage if you simply lose an item, and there is no deductible.
Remember that items can go up or down in value. Floaters and endorsements are priced on the appraised value of an item or collection, so have periodic reappraisals done to make sure you are purchasing only the amount of coverage you actually need.
The best way to keep track of your belongings and make sure they are adequately insured is to create a home inventory.
3. Do I still need comprehensive/collision on my car?
If you’re driving an older car that is worth less than $1,000 – or less than 10 times the insurance premium – the optional coverage may no longer be cost-effective. Consider saving money on your premium by dropping either comprehensive or collision.
4. Do I have enough liability insurance to fully protect my assets?
Standard homeowners and auto policy liabilities pay for judgments against you and your legal fees up to a limit set in the policy. However, in our litigious society, you may want to have additional protection—that’s what an umbrella liability policy provides. An umbrella policy kicks in when you reach the limit on the underlying liability coverage in a homeowners, renters, condo or auto policy. If your assets have increased of late, you’ll have more to lose and may want to consider this extra layer of protection.
5. Should I rent out my house during the vacation period?
Whether you own a second home that you plan to lease to a tenant or want to rent out your primary residence though an online service such as Airbnb, your first step should be to call your insurance professional. Depending on the rental scenario, your standard homeowners policy may not cover losses incurred while your home is rented out, and you may require a more specialized insurance policy.
If you are taking an expensive, pre-paid vacation or an active vacation such as biking or hiking in an exotic locale, travel insurance can help protect the financial investment in your vacation.
For more real estate information, including a FREE Home Market Analysis, please contact me at firstname.lastname@example.org or on my mobile phone at 215-872-0277.