Recession Proof Living

What do you do when you receive a notice that your home insurance policy is up for renewal? If you’re like most people you just sign a check and drop it in the mail. But this may not be the best
idea. If you simply renew from year to year, you could run into problems if you ever have to file a claim. The cost to rebuild your home may have changed since you took out the policy. There is
also a chance that you’re paying way more than you need to for the coverage you have.

To be on the safe side, it’s best to review your home insurance policy on a regular basis. Renewal time provides the perfect opportunity because you’ll have your policy in hand and it will be
easy to make changes before you write a check. With a quick review, you may discover ways to improve your coverage and maybe even save a little money in the process.

Step One: Has Anything Changed?

When your renewal notice comes, the first thing you should do is read over the policy. Make sure all the basic information is correct– name, address, phone number, and property description.
If you have a garage, shed, or other outer building, there should be a notation on the policy. Also ensure the information concerning the mortgage holder is complete, accurate, and up to date.

Special tip: If you had a second mortgage that’s paid off, make sure the mortgage holder isn’t listed on the policy. In the event of a substantial claim, all parties who have a vested interest in
the home are included on the check. If the second mortgage holder is listed, but no longer has an interest in the property, it’ll be a nuisance to straighten the matter out. It’s far better to have them
removed before it becomes an issue.

Step Two: Do You Have Enough Coverage?

One of the most important things to look at when reviewing your home insurance policy is the amount of coverage you are carrying. A common mistake people make is to underinsure
their home. Although it may be tempting to save a little money in premiums by not carrying all the insurance you really need, you could end up having significant out-of-pocket expense if
something does happen.

Special tip: Most policies have an automatic cost-of-living adjustment. Due to inflation that amount generally goes up. In your review, determine if this adjustment exists and if it will cover
you in case of emergency. If the adjustment is a minimal amount, you may be able to save a little money by foregoing the increase. Be sure you keep an eye on it though, in case of larger
increases in the future.

Step Three: Have You Upgraded Your Home?

If you’ve made significant improvements to your home or property, it is likely more valuable than it was before. Your coverage should reflect this increase. If you need to file a claim or
rebuild the property and your improvements haven’t been included in your policy, you could end up taking a loss.

Special tip: It is your responsibility to inform your agent if you’ve added a security system, a new room, or redone existing parts of the home, such as a complete remodel of the kitchen. These
things can add considerable value to the home and may cost a lot more to replace. A security system could also net you a discount if your agent is aware of its existence.

Step Four: Are Discounts Available?

Find out about any discounts you’re entitled to. It may be to your advantage to combine your home insurance policy with auto and life insurance policies. Multi-policies usually lead to
considerable savings.

Special tip: If you have any questions concerning discounts–what’s available and how much the savings might be, contact your agent. They have the answers and will be more than happy to help
you determine what choices to make. After all, a satisfied customer is a happy customer, and a happy customer means repeat business.

Step Five: It’s Time to Make Improvements

After reviewing your policy, sit down with your spouse and discuss ways you can make improvements to your policy. Determine if there are any holes in your coverage that need to be
addressed. Your agent should call periodically to go over your policy with you, and point out any areas where prices or coverage have changed. Review your policy with them at that time. If
your agent doesn’t contact you on a regular basis you may want to consider shopping around for an agent that will take a more personal interest in you and your property. The bottom line is that
you want to make sure you’re protected in case of emergency, and if something does happen you want to be able to concentrate on making the necessary repairs and not on collecting the cash to
do so.

Special tip: Any time you can raise your deductible your premiums will drop correspondingly. If you take this route, make sure doing so won’t cause you to lose any sleep. Raise it only as much
as you feel comfortable with.

Guest post from Bailey Harris, who writes about homeowners insurance forwww.homeownersinsurance.org.