A homeowner's insurance policy should be ever-evolving. As the needs of the owners and the dynamics of the house change, it is essential that the policy is updated to reflect these changes. Learn about some of the events that should prompt you to update your homeowner's insurance.
Rising Market
The market price of your home when you first purchased it is likely not the same as it is today, especially if you purchased your home several years ago. In a hot housing market, it is not unheard of for the value of a home to increase several percentage points a year.
In the event that you sustain significant damage to your home and the value of your homeowner's insurance is based on the value of your home when you purchased it, you are likely to not have the coverage you need to replace your home. Whenever the market value of your home increases, your insurance protection should also increase.
Significant Home Renovations
A rising market should not be your only measure of an increase in your home's value. As a general rule, anytime you make a major renovation to your home, the value of your home will likely increase. Major renovations can include room additions, finishing the basement, or even remodeling the entire kitchen.
If the value of your policy reflects the value of your home pre-renovation, you may not have enough coverage in the event of a catastrophe. Upgrade your policy whenever you upgrade your home to ensure your interests are protected.
Increased Liability Concerns
Whenever the liability concerns for your home change, it is also worth it to consider adjusting your policy. For instance, take a family with a pool and a few teenage children. As the children have gotten older, they have started to invite more of their friends over to hang out in the pool.
Since the property owner is responsible for the safety of any person on their property, if something were to happen to one of the guests while they were in the pool, the family could be financially responsible. Increasing their liability coverage in this instance to ensure they are safeguarded against an accident is helpful.
If you need to update your insurance policy or you are unsure if you need to, it is best to speak with an agent who can address any concerns you have and work to ensure your policy coverage is adequate.
To learn more, contact a homeowner's insurance company.
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