Questions to Ask About Homeowners Insurance
With the winter season beginning, when the kids are fully immersed in scholastics and you’re busy in the swing of things, it’s a good time to review your home insurance coverage. As your life changes, so do your insurance needs, so take the time to ask yourself the following:
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.
DO I HAVE ENOUGH COVERAGE FOR EXPENSIVE ITEMS?
Have you bought or received any valuable items 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. 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.
The best way to keep track of your belongings and make sure they are adequately insured is to create a home inventory.
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 is an extra layer of protection that kicks in when you reach the limit on the underlying liability coverage in a homeowners, renters, condo or auto policy.
DO YOU PLAN ON RENTING OUT YOUR PROPERTY?
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.