Think of this as your 2019 workout and nutrition plan, except it’s for the health of your home. We rarely ever question our homeowners insurance policy until something goes wrong, but that’s one thing we are going to change starting today.
Checking your homeowners insurance once a year is not just about making sure you’re covered for a disaster, it’s also to identify opportunities where you can save, and we’re here to look out for your overall financial health.
We understand that we can only know what we know, so it’s up to your insurance advisor to keep you educated and aware of updates and tips that might be relevant to your situation. Then it becomes your job as a policy owner to listen and take action.
Add this to your list of things to do for 2019:
Block off an hour to contact your insurance advisor so you can run through an annual check-up on your homeowners insurance.
Call it a routine inspection. Doing this will help you save money and help ensure you’re covered for your needs.
Here are the key 6 questions you should review for your homeowners insurance checklist for 2019:
1.) What type of coverage you have? Will your existing policy cover the amount it would cost to rebuild your house?
Extended Replacement Cost?
Guaranteed Replacement Cost?
Actual Cost Value?
Knowing the difference between these policies can help you decide how much coverage you really need.
Rule of thumb: get coverage for the amount it would cost to rebuild your home from scratch in today’s terms.
It’s tempting to think that you should cover your home for its market value. While that’s part of the formula, you wouldn’t be accounting for inflation–the amount construction costs have risen, and other expenses related to replacing your property.
2.) Do you have a list of quirky things and workarounds that you deal with in your home? Perhaps a shady plumbing and sewer system? Do you own an old home? If the quirky plumbing finally gave way, would it devastate your day-to-day comfort? Discuss specific aspects of your home with your insurance agent. Some risks are not covered by your standard policy.
Perhaps you live in a weather-prone zone? There are no earthquakes here, but we do experience flooding in many ways. Coverage for weather disasters are not included in a standard policy and it’s worth having the conversation with your insurance advisor.
3.) What’s new in your life?
Do you have additional family members? Did anyone move away? Have you gotten divorced? Life status changes could impact your liability requirements.
4.) Have you done any home improvements?
Anything that changes the structure of your home can change your policy. Home improvements can increase the value of you home and your coverage should reflect the increase in value to maintain adequate coverage. In other cases, home improvements can also trigger lower premiums which result in savings.
5.) Do you have the right deductible? In other words, are you paying the right deductible for your needs? You can lower your monthly premiums by increasing your deductible, resulting in overall savings. Finding the deductible sweet spot is a job for you and your advisor to dig deeper.
6.) Are there any special discounts you can take advantage of?
If you don’t ask the question, you’ll never know. Be firm in your conversations with your insurance agent about the savings you’d like to see. If they are a good agent, they will spend time to listen and help you find savings and different options. It’s not uncommon to meet homeowners who have shied away from asking because they’ve filed a claim in the recent past and have felt certain they couldn’t lower their overall cost of homeowners insurance. Don’t be this homeowner. Just ask.
Setting aside an hour to do this makes you a responsible homeowner. Do things differently this year and stay proactive. Contact us with these questions and we’ll help you figure out how to save money and have the right amount of coverage for your home and present lifestyle.
About Jason Cass
I am the Co-Owner of The Insurance Alliance. I love to speak nationally on the topic of insurance and I am the author of "Customer Service is Just Foreplay" an Amazon Best Seller. I don't sell insurance, I help people buy it.