At least once a year, homeowners should be reviewing their homeowners insurance policy (or renters, their renter insurance)—checking to ensure the coverage they have is still adequate for their needs.
Common reasons to update a homeowner insurance or renters insurance policy may include:
- New furniture is purchased, and the property coverage needs to be increased.
- Renovations have been completed, increasing the value of the home.
- An add-on coverage is necessary—high-value (art or jewelry), flood insurance, or umbrella coverage.
- The insurance provider has changed policy coverage (exclusions/inclusions or coverage limits).
Homeowners insurance and renter’s insurance is supposed to provide peace of mind by protecting your property. It is important to ensure that your insurance policy is continuing to do this for you.
If your renters or home insurance policy is no longer enough for what you need, you can get a quote for a modified policy that better suits you from your current carrier—but it can also be beneficial to seek a quote from a separate insurance provider or ask an independent insurance agent in order to get a quote from multiple sources at once. The Insurance Information Institute recommends getting a quote from at least three different insurance carriers in order to best compare cost and policies before committing to a new policy.
In addition to cost, policyholders should also keep other important factors in mind, such as:
- The specific coverages included in the policy. Not all policies are the same, even if the coverage limits are identical on policies. While one insurance provider may extend coverage to fences, another may not. Be sure to read the fine print of each insurance quote so you can truly compare the value of the policy compared to the cost.
- Covered perils. Like above, the events where you may be eligible to file a claim can vary from provider to provider. Be sure to find a policy that includes perils you are most likely to face. For example, Floridians should worry more about coverage for hurricanes than they should about earthquakes.
- Types of coverages included in the policy. Not all insurance carrier build their policies the same. You’ll want an insurance policy that at least includes Dwelling Coverage, Other Structures (like a detached garage or shed), Personal Property, and Liability. Additional options like coverage for living expense if your home is damaged or coverage for high-value items may be considered rider policies (with vary coverage limits) and not standard.
It is also very important to consider the deductibles of your current policy and compare them to your new quotes. A higher deductible may lead to a lower monthly cost but may not be ideal if you ever have to file a claim. Similarly, homeowners and renters should also monitor coverage limits—the maximum amount the insurance company will pay out for damage. When seeking a quote for a new policy, be sure you elect similar limits to compare the cost appropriately.
When shopping around for a new renters or home insurance policy, be sure to do more than a cost comparison but rather than a complete policy comparison and base your decision on the best types of coverage for the best cost—selecting value and quality over assumed “savings”.