An emerging perspective to reviewing your Homeowner Insurance

By Kim Fitzgerald, Montagno Insurance Agency Inc.

Homeowners Insurance is an integral part of a homeowner’s financial portfolio.  Homeowner policies are comprised of two basic sections:  Section One covers the house, other structures and your personal property; Section Two offers Personal liability and medical payment coverages.  Both these facets are important in protecting our most expense asset – our home.  Policies are enhanced by endorsements to further enrich the coverage that is provided.  It is always advisable to review your homeowner insurance policy annually to update any added features or additions or newly acquired personal property. 

 

As the Pandemic set in last year and most businesses sent their teams home to work remotely, many clients reached out to us to ask if their homeowner policies would coverage in -home business exposures.  A basic homeowner policy does include some coverage for business personal property so in many cases, the homeowner was protected without any additional steps.  As we move through 2021 and industries evaluate if brick and mortar space will again be utilized, we encourage homeowners to review their policies to be sure that the appropriate endorsements are included as they continue to work in the at home offices.

 

Many homeowners took to remodeling and renovating projects while at home last year.  Many families purchased swimming pools to help pass the warm months at home.  Clients started to share recurring comments about delays for products and work completion.  A common point brought up included the increased cost of items such as lumber.  These circumstances shine an important light on the importance of reviewing your home insurance.

 

Each year when your home insurance renewal arrives, you may note that the Dwelling coverage (or Coverage A amount) has increased slightly over the prior year.  Costs go up each year and it’s vital to be sure that the coverage you carry is ample should there be the unfortunate occurrence of a loss.  With building and material costs escalated from the pandemic, this is the perfect time to pull out your policy and review the coverage.    The dwelling coverage is typically based on the characteristics of your home:  year built, square footage, style of home, exterior finish, bathroom count, type of heat, etc.  Be sure to make mention if you have put an addition on your home or finished your basement or converted a garage to living space or added a bathroom. 

 

Don’t be surprised if at the end of the review exercise, it is recommended to you to increase the amount of coverage.   Homeowner policies are usually replacement cost policies.  When a loss occurs, we want to be made whole; we want our property restored to the condition it was in prior to suffering the loss.  Homeowner policies include debris removal and with the changes to cost structures in construction, the cost to remove the debris has also increased.  That cost is covered with your dwelling limit.  Ask your agent or carrier how much additional replacement cost coverage is included with your policy and if you are able to purchase more, should you choose.   

 

I know you are probably thinking “my rate is going to go up“.  Adding coverages and additional benefits could increase the rate, but if you are protecting your home correctly, and have what you need should something unforeseen occur, then you can feel good about that component of your financial protection.  Part of the review process is also about capturing discounts for things like security systems or water sensors.  Be sure to make mention of any of those that you may have had installed in your home since the time of your last review. 

Building a comprehensive insurance portfolio for a client is a rewarding experience.  If I can assist you with your coverage review, I am happy to help.