5 Questions to Ask Before Renewing Your Home Insurance

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canstockphoto27910607 - blog 300x239“I’m not an insurance expert”, you say.  Maybe not, but you are the expert on your life! Whether you realize it or not, you are in the best position to make informed decisions about your own unique insurance needs.  While an insurance representative can provide insurance advice, only you are privy to the changes that have occurred in your life since your insurance policy was bought or last renewed.

Before renewing your policy, take a few minutes to ensure that your insurance policy has kept up with your needs.  Asking yourself the following five questions, is a great place to start.

1. Is anyone new living in your home?

If you decide to rent out rooms in your home, you may require additional insurance coverage.  Discuss your particular situation with your insurance broker to determine if extra coverage is required in your case.  In addition, a tenant’s personal property will not be covered under your home insurance policy.  Therefore, it is a good idea to remind your tenants that they should be purchasing their own insurance policy to protect their assets and to provide personal liability protection.  If for example, a pipe bursts and they must move out temporarily during repairs, such a policy may also pay for the additional living expenses they incur.

2. Have you acquired any valuable objects, such as computers, musical instruments or antiques?

While coverage is provided for personal property under a standard home insurance policy, some types of personal property have special limits.  Some examples include jewellery, cash, computers, musical instruments, fine art, antiques, collectibles, bicycles and sport equipment.  If you own such items whose value is in excess of the limits specified in your policy, you will need to purchase additional coverage to ensure that these items are adequately covered.

3. Have you renovated your home?

If you have embarked on a renovation or added a suite to your home, an adjustment to your insurance coverage may be required.  In fact, depending on the extent of your renovation your policy could be voided, leaving you uninsured, if the insurance company is not informed!  The premium you paid for your homeowner’s policy was based upon its condition at the time you bought the policy, and on the estimated cost to reconstruct it should it be damaged or destroyed. The renovations that you make increase the “replacement cost” value of a home and therefore the coverage needs to be adjusted accordingly.

4. Have you had a hot-tub, pool or sauna installed?

When you install a pool or hot-tub you need to ensure that you are sufficiently covered for two basic items – damage and liability.  Pools and hot-tubs are expensive items which increase the replacement value of your home, so make sure the level of coverage that you have purchased is appropriate.  You will also want to check your existing policy to see if any special limits or exclusions apply.  In addition, these items increase the risk that someone may be injured at your home.  You may be sued even if your pool was used without your permission, therefore it is wise to consider increasing your liability coverage.

5. Have you, a family member, or a tenant started a home-based business?

Your homeowner’s policy protects your home and the risks related to normal activities in and around the home.  Having a home-based business changes those risks.  Homeowners’ policies exclude coverage for buildings that are used in whole or in part for business purposes. Therefore, if you begin operating a business from your home, you need to inform your insurance company, otherwise your policy may be considered invalid.  Obtaining the correct coverage for your home-based business, on the other hand, will mean that you are covered for things like the increased liability associated with clients visiting your home, for the computer and software used to run your business, and for any special equipment and/or materials kept in your home for business purposes.

Obtaining the additional coverage required to adequately protect your assets is often relatively inexpensive.  The cost of ignoring changes in your insurance requirements, on the other hand, can have huge financial implications in the event of a denied claim.  At Park Insurance, we believe in offering our customers more than just insurance policies, we offer our customers insurance expertise. We encourage you to call or visit us with your insurance questions, we are here to help.

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