As the end of 2015 approaches, many Americans are looking forward to various celebrations and events. The end of December brings holiday get-togethers for some, followed by festivities welcoming in a new year. One thing that may slip the minds of homeowners is checking in on their homeowners insurance policy.
While not required, home insurance is a smart purchase, as it will protect you and your family from financial hardship in the event of theft, vandalism or fire. However, having an insurance policy is only helpful if it properly covers your possessions and the value of your home.
You likely purchased home insurance when you bought your house. At the time, it was probably appraised for a certain value. If you have lived in your home for a number of years, there's a chance the value has fluctuated at least a little bit. Plus, you have probably brought more belongings into your home you would want covered under your policy. Because of these factors, it's a good idea to perform an end-of-year homeowners insurance policy review.
Where should you start?
The first thing you should do is to review your insurance policy as there may be changes in your home since the last time you bought your policy. It is advisable to take note of what has changed before the review of your policy. Albuquerque, New Mexico-based NBC affiliate KOB-4 said adding to your home or renovating it will increase its appraisal value.
"Renovating your home will increase its appraisal value."
For many, the holidays are a time of giving and receiving. If you have children, you may have decided to give them electronics for Christmas, Hanukkah or just as an end-of-year gift. Or, maybe you treated yourself or your partner to something nice. Some homeowners may not be aware that not all of their expensive items are automatically covered by the standard homeowners insurance policy. It's important to include all new expensive or luxury items on your policy if you want them covered. To do this, the Nevada Division of Insurance suggested making an inventory of all items you want covered - old and new. Document them by saving receipts and taking photos or a video of them.
Next Step to Take - Figuring out who's being covered
For some households, figuring out who is covered by your insurance is easy. The named insured, his or her spouse and any children are covered, according to 360 Degrees of Financial Literacy. In fact, anyone who lives in your house, is under the care of one of the residents of the home, is younger than 21 or a relative is covered by your homeowners insurance policy. For instance, a child that is older than 21 is covered, but a friend who lives in your home and is older than 21 may not be. However, some families may have people who are regularly in the house and aren't sure who is covered.
Generally, anyone you invite onto your property or who you hire is insured under your policy. Guests, nannies, and housekeepers all qualify for this. However, if you are renting out a portion of your home or the entire house, various insurance carriers will have different restrictions on who is qualified for coverage.
An apartment with a renting tenant may need his or her own renters insurance policy if the entrance to the living quarters is different than the one to the main house, or if the renter is not related to the named insured. Only your insurance provider will be able to tell you whether the renter will need a separate renters insurance policy.
CBS News also explained that children who go to college may have different insurance needs. If your child will be living in a dorm, your insurance policy may cover some of his or her belongings. Floating policies may be a good idea to cover expensive items, like electronics or sporting equipment. Most policies won't cover your child's belongings anymore if he or she rents out an apartment. A renters policy is a good idea in this case.
Talk to the Experts
Once you know what aspects of your insurance policy you may need to update or change, get in touch with your insurance provider and ask to meet to review your policy. The Nevada Division of Insurance advised that homeowners review the policy to look over current coverages before meeting with the insurer.
During your meeting, explain the changes that have occurred, whether they are related to the appraisal value of your home, expensive belongings that should be covered, or any change in residents of the house. Your insurance agent should be able to explain the best course of action regarding these changes.
Homeowners should also ask about flood or earthquake coverage. These typically aren't included in the average homeowners insurance policy. However, there are certain areas of the U.S. that are more exposed to these natural disasters than others. If you live in Florida, California or New Jersey, you may want to inquire about flood insurance, according to U.S. & World News Report. Likewise, residents of the earthquake-prone states of California, South Carolina and Utah would likely benefit from adding earthquake insurance to their policy, reported Time.
Before the meeting is over, don't forget to ask about any discounts you may be eligible for, KOB-4 said. Even changes to your neighborhood could qualify your home for a discounted rate, such as a new fire hydrant being installed across the street. Discounts are a good way to save you some money, though some insurance agents won't disclose details about them unless specifically asked.
December is always a busy time of year. However, making time to update your homeowners insurance policy will be worth your while in the long run. To make sure you are getting the best coverage for your home, compare rates on CoverHound's website soon.