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10 Reasons to Review Your Homeowners’ Insurance Policy and Make the Most of It

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Published on June 17, 2021. EST READ TIME: 3 minutes

If you have invested most of your life’s savings into buying or building that house of your dreams, as most people do, it makes complete sense to insure it. However, your home insurance policy comes with quite a few clauses, terms and conditions. A policy document also indicates the coverage and benefits you will receive. At the same time, any damage or liability that is not stated in your policy paperwork is not covered by your insurer. So, it is recommended that you, as a homeowner, evaluate your policy at least once a year. Read on to know about the 10 reasons why you should go for that review.

• Property's worth increases with time
  No matter where you own a property, its value sees appreciation over time. A property purchased in the year 2000 may today be worth twice as much as it was back then. This is because of the cost inflation index decided by the central government. As such, your home insurance coverage needs an increment to match the property’s current value, as per CII. Otherwise, in case of any unforeseen event, the claim will be as per the property's previous value. 

• Increase in personal contents
  You may have added various fittings and furniture pieces to your home over time. However, at the time of home insurance purchase, you may not have had them. So, it is important to consider the value of personal belongings along with your house while deciding the cover you need. However, your current homeowner's insurance limits may not be sufficient to cover your personal belongings. Some of your possessions may need additional coverage.

• Home improvements
  If you have undertaken any home renovation work, it will increase the replacement cost of your property. Accordingly, it is critical to make the necessary changes to your homeowner's policy's coverage. 

• Starting a home business
  You may require an additional setup if you want to start a business from your home. Hence, it is critical to talk to your insurer about the coverage for the same. In some situations, you may need to get separate commercial insurance coverage to protect your business assets.

• Protect your personal assets
  Just like your income, your personal assets grow with time. As such, if someone brings a liability charge against you, your home insurance may not provide adequate coverage. Another reason why you should review your policy from time to time.

• Installation of home security systems
  Did you set up security surveillance at your home?  Your insurer may offer a discount on your home insurance policy. However, this may vary from one insurer to the next. 

• Pets
  Got a new pet? Your insurer might need information about the same. Some pets may require additional coverage. However, this is not always the case. Your insurer may offer a higher risk coverage to some breeds. This will increase the amount of home insurance premium though. 

• Swimming pools
  If you have a pool or Jacuzzi in your backyard, you might need extra liability coverage. Swimming pools, trampoline, or Jacuzzis increase the risk of a property. And extra liability coverage will protect you against any accident. 

• Leasing
  Always notify your insurance company before renting out your home. Your old policy may not cover losses sustained during the rental time if you failed to inform your insurer. Your insurer may cover renting on Airbnb, long term rent or homestays. 

• Check for discounts
  Your insurance premium depends on various factors, like marriage, job switch, or retirement. As discussed, installing a surveillance setup also has an impact on your premium rate. Hence, check for discounts and offers with your insurer.

To conclude

Since a home insurance policy protects both the house's structure and its contents, getting the right one with adequate coverage is a wise move. And reviewing it periodically is wiser. This will not only protect you financially against any harm done to your property, but also take care of third-party liabilities.

Disclaimer- The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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