Owning a home is one of the American dreams. And keeping that dream means making smart financial decisions – including how you protect it. Every homeowner should know the value of a homeowner’s insurance policy. But it can only protect your home if you keep it up to date! Many homeowners wonder “should I increase my home insurance policy?” When you start to wonder that, it’s likely that you should!
When Should I Increase My Home Insurance Coverage?
Homeowners insurance policies are designed to protect both the property itself and the items it contains. These policies typically cover damages or losses from events like fires, storms, theft, and other perils. However, as your property or personal property changes over time, it’s important to make sure that your insurance coverage is updated to stay current.
Why do you need to update your insurance coverage? Because insurance only covers up to the amount you establish with your provider! That number means if damages exceed your insured maximum value, you’ll be on the hook for the costs beyond that value if catastrophic damage happens. Most insurance companies offer endorsements that can be added to provide the extra coverage to cover the differences in the home’s insured value versus what it would cost to rebuild.
So, what are some of events in your life that might lead to needing an update to your homeowners insurance?
Renovations to Your Home
One of the most common events that should lead to updating your coverage is renovation. Renovations can make a big change on the value of your property, both in terms of the house value and the personal property.
For example, if you add a new room or section to your home, it can significantly increase the square footage, and thus the value of the property. In this case, it’s important to reevaluate your property insurance to make sure you have enough coverage to protect the newly added space and the value contained within!
Installing a Security System
Another event that could warrant a reevaluation of your coverage is the installation of a centrally monitored security system or even simply making major security updates. Anything from a robust security system to installing deadbolt locks could potentially affect your premium.
When you make changes like these, you won’t need to increase coverage, but you should let your agent know so that they can adjust your policy as needed.
What Happens If I Don’t Update My Insurance Coverage?
Homeowners insurance is a critical component of owning a home, as it protects you financially from unexpected costs related to replacement or repair of your home and the property you own. If you don’t update your coverage, you put yourself at risk of being underinsured. This is a more common problem than you may think – reports suggest that over half the homes in the US may be underinsured. Moreover, the price of materials for rebuilding homes continues to increase, leaving homes underinsured.
Being underinsured means that if something unexpected happens, such as a natural disaster or a break-in, your insurance reimbursement may not cover the full cost of repair or replacement for damages. This means that you could be left paying a large portion of the cost out of your own pocket. This can be financially devastating, especially if you are already dealing with the stress and emotional trauma of the event that caused the damage.
Furthermore, being underinsured can leave you unable to replace your property, leaving you without a home or important personal property. This is a situation that nobody wants to find themselves in, yet many people unknowingly put themselves at risk by failing to update their coverage.
Therefore it is crucial for homeowners to review their insurance coverage regularly and make sure that it still meets their needs. Keep in mind that as your home and your personal property change over time, so should your insurance coverage. This can help to ensure that you are fully protected in the event of an unexpected loss.
How Often Can I Make Changes to My Homeowner’s Insurance Policy?
When it comes to homeowner’s insurance, there’s generally no limit to how often you can change your policy. This means that adding new coverage or adjusting existing coverage is as easy as contacting your insurance agent or provider. It’s recommended to review and potentially update your policy every time an event makes a significant change to your property or possessions.
Being adequately insured can make a big difference in the event of a disaster. If you have the right coverage in place, you will be able to move on from the event and begin to rebuild your life without the added stress of financial burdens. On the other hand, if you are underinsured, a disaster can leave you struggling for months or even years to get back on your feet.
As a homeowner, it is crucial to have your insurance policy evaluated and updated regularly. This will give you peace of mind and ensure that you are prepared for the unexpected.
Contact Iott Insurance for a Quote Today
Iott Insurance has been a part of southeast Michigan for over 50 years. We can help you plan your insurance needs and find you the right policies or plans to protect you.
Or you can visit one of our three offices in southeast Michigan:
Blissfield, MI – (517) 628-4574
Lambertville, MI – (734) 807-3825
Petersburg, MI – (734) 215-9884
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