You finally did it. You took the plunge and updated your outdated kitchen just like you’ve always wanted… Or maybe you finally completed that extra half bath off the study, or tacked on a killer deck to better survey your backyard kingdom. You’ve been spending so much extra time at home, it was definitely the right time for a few upgrades — but now it’s time to see how these changes may have impacted your insurance policy, and whether or not you’ll need to update your homeowners insurance.
“What we’ve seen in the midst of the pandemic is a large increase in building supply costs across the board,” says Melonie Jeffrey, office manager for the State Farm agent Heath Parker in Mobile, Alabama. “The upgrades to homes combined with increased costs to rebuild have caused homeowners to be uninsured without even realizing it,” Jeffrey says.
Depending on what you’ve done, you may no longer have the coverage you need. Here’s what you need to know to determine if you need to update your homeowners insurance policy — or if you just need a policy review — and how to go about getting the coverage you need.
“In most instances, a new policy isn’t necessary, rather you’ll need a review of your existing policy and in-depth conversation with your local agent to be sure all of your bases are covered when protecting one of your largest investments,” Jeffrey says.
When To Talk To Your Agent
Any large change to your home or living situation should spark a conversation with your insurance policy holder. Here are some examples of times when you need to pick up the phone and let them know what’s going on in your life.
– When you make any large improvements
– When you have any additions or updates to your home’s square footage
– If you put on a new roof
– If you add any additional structures on your property
– When you put in a pool
– If you make any smaller improvements that might raise your home’s value
– If you add or remove a fireplace or wood stove
Sometimes, You’ll Even Pay Less
Not everything you have done to your house will necessarily increase your need for insurance. Some things, like removing a fireplace or upgrading the wiring or plumbing or even a new roof, can actually work in your favor and decrease your homeowners insurance because your house will be deemed safer.
Something else that you may not realize can actually lower your insurance is adding a monitored alarm system. For some policies, having this added level of protection can help you save money, just check with your insurance provider.
“Anything you can do to improve the safety of your home will help lower your insurance costs,” says Stephen Kates, Bankrate insurance analyst and certified financial planner. You may also want to mention that you have a carbon monoxide detector and a fire extinguisher. “It never hurts to be front of mind with the things you’re doing to protect yourself.”
Other Changes To Consider
There are also some lifestyle changes that can change your coverage, Kates says. This could include a new baby, or something like renting out a room or putting a room up for rent online.
“It may not change things in a big way, but any updates to your home are worth bringing up to your policy holder,” Kates says.
Also, the purchase of expensive items like jewelry, electronics, and works of art may necessitate additional coverage, as can getting a pet. Specifically, certain dog breeds can impact your homeowners insurance — especially those viewed as “dangerous” breeds. If something were to happen on your property and your insurance company doesn’t know your pet is part of the family, you may not be covered.
Schedule Regular Reviews
Yes, changes to your homeowners’ insurance can potentially increase your insurance costs, but if you’re going to chat with your agent anyway, why not get a few additional quotes while you’re at it? No, shopping around for insurance isn’t fun, but saving money certainly is.
Ideally, you’ll revisit your homeowners policy once a year whether you’ve made any big changes or not, per Kates. Keep in mind that an improvement to your credit score can actually reduce your premiums, depending on your credit score and policy, so keep an eye on that as well.
Ultimately, you should always look to keep your policy holder informed of everything that’s going on in your life, in terms of your assets. “Hiding things only hurts you,” Kates says. “You’ll want that coverage to be there. If you’ve hidden something, it can be detrimental to the way they look at everything.”
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