Should You Review Your Home Insurance Policy at Renewal?

Does your current homeowners policy meet your needs?

All too quickly, homeowners renew their insurance without a second thought – or glance at their policy. Unfortunately, this hasty decision can come back to haunt homeowners. If you’re renewing a 5-year-old policy that hasn’t been updated since you bought it, you could be doing your home and finances a great injustice. You may well be underinsured and under-protected. As a general rule, homeowners should review their policy upon renewal as well as bi-annually.

Here’s what to look out for when you do reassess coverage.

Structure

This coverage is the amount that it would cost to rebuild your home if it were completely destroyed by a covered peril. Don’t make the mistake of confusing the home’s value for the price that you paid for it. The final price tag that you paid likely includes the plot of land. If your home were to be destroyed, you wouldn’t need to rebuy the land. A homeowner policy will also need to include the cost of materials and construction labor, depending on the market price at the time.

Contents

Contents coverage is typically set between 50 and 70 percent of your home’s value and can help to repair or replace your belongings if they’re damaged or destroyed at the hands of a covered peril. Even though you may have coverage, every policy has its limit. Expensive items, such as a rare art collection, antiques, or fine jewelry may not be covered under standard homeowners insurance. The best way to determine if you have enough coverage is to create a home inventory and update it when you sell or buy items.

Liability

Liability coverage is an absolute must. If someone is injured on your property, you may be held liable to pay for their medical expenses. Furthermore, he or she could sue you if they deem the injury as a result of your negligence. Liability risks such as owning a dog and having a pool must be factored into a policy.

With these tips and the right homeowners insurance, your home can stay safe! Contact McCarty Insurance Agency to get started on the right policy for your home and needs in Fresno and areas of California.