Adjusting Your Homeowner's Insurance to Suit Your Needs
When you first purchase homeowner's insurance, it's only natural to breathe a big sigh of relief now that your family's home is protected against catastrophe. But as times change, so do home prices, possessions, liability vulnerabilities and other circumstances. Meanwhile, that original policy continues to cover what it always did — or better or for worse. Consider these critical questions to determine whether your home insurance might benefit from timely right-sizing.
Do You Have Too Little Insurance?
Many household accumulate all kinds of additional value over the years, from the assessed value of the property itself to furnishings, jewelry, appliances, decorations, renovations and even extra rooms. If you haven't adjusted your home insurance coverage upward to reflect these rising values, you may well find yourself shortchanged when trouble strikes and you must file a claim.
How can you avoid this outcome? Start by getting the current value of your home and property reassessed. If you have to rebuild your home from scratch and you want to live in the same neighborhood as before, you'll want to bump your coverage up to this new replacement value.
You should also take inventory of your valuables and have them valued as well. Your family heirlooms may be worth more than ever, while there may be many new additions whose value hasn't even been accounted for. If you can't raise the personal property coverage in your homeowner's policy to cover these items adequately, it's time to take out separate or extended policies on them. For instance, if your home insurance only covers a fraction of your jewelry's value, you can take out an extension called a floater to cover the difference.
Do You Have Too Much Insurance?
Yes, it's possible to have too much homeowner's insurance. Just as some households and their possessions balloon over time, others may shrink. As children grow up and move out, and as working-age parents reach retirement age, many homeowners enter into a downsizing process. Even if you remain in the same house, you may divest yourself of various furnishings and other items you no longer need. Maybe you sold that rare coin or stamp collection years ago — but you're still paying a monthly insurance premium based in part on that collection's original value.
What about the medical and liability expenses your homeowner's policy protects you against? If you recently stopped working from home, you may be carrying levels of liability insurance you no longer need, simply because you no longer have customers coming to visit you. Maybe it's time to reduce these and other specific forms of coverage to better reflect your current reality.
The Deductible/Premium Seesaw
Last but not least, there's the issue of deductibles versus premiums. Thirty years ago, you may have moved into a high-risk neighborhood, so a lower deductible made sense. But now that your neighborhood has enjoyed significant improvement, your risk has dropped. This would be a sound reason to go ahead and raise the deductible so you can start paying lower premiums. (Of course, if your situation has gone the other direction, you may wish to take a reverse strategy.)
Review Your Insurance With a Professional
Figuring out how much home insurance you really need can prove a tricky exercise. A trusted insurance brokerage can help you right-size your policy or policies so you can once again breathe that sigh of relief you first enjoyed when you bought that first policy. Contact Su Casa Valley Insurance Services for professional guidance!