Spring is in the air – and hidden, dusty places in your insurance coverage need a deep clean!
We spring clean our closets. We clean our attics, garages and basements. The ambitious among us might even pull out the fridge and clean underneath.
Who cleans their insurance policies?
*sound of crickets chirping*
You are not alone! The good news is you can start right now – no heavy labor required.
A simple review of your coverages will reveal what needs to be fixed, adjusted, or tossed completely – just like those mystery boxes in your basement.
But don’t just dust around the corners and hit the high spots – take a deep dive and declutter as you go.
Take a look at 5 easy questions to get started:
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 homeowner’s 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.
Flood coverage is not the same as water & sewer backup!
2. Do I have enough coverage for expensive items?
Have you bought or received as a gift any valuable jewelry since you purchased/renewed your policy? When was the last time you had the items you owned appraised? Standard homeowner’s 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 that item—and there is no deductible.
But 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—ask us how, or try a photo, video or template inventory here How to do 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 coverages 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 policies liability coverage, paying 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 homeowner’s policy may not cover losses incurred while your home is rented out, and you may require a more specialized insurance policy.