Your policy should be sized up on a yearly basis (at least), but these life events warrant an immediate review.
Another policy to re-read before renovating your home is your umbrella policy—which is excess liability that sits on top of your home (and auto) insurance and will kick in if your homeowners insurance runs out before the issue is financially resolved, according to Shaw. If the neighbor who fell over some lumber in your backyard ends up needing an ambulance, an overnight stay in the ER, and additional medical care, your liability coverage might be spent before you can even think about the legal fees you’ll have to pay if he sues you for pain and suffering.
“If your liability is exhausted, the umbrella policy will kick in for an additional million [dollars] or more, depending on what you purchase,” explains Shaw, noting that those with equity in their home or large incomes should be aware of it. “Really, it’s a shield between you and your assets.”
Finally, if your home reno includes upgrades that will greatly increase your overall home value, you want to make sure your ‘new’ residence is not underinsured. For example, if you recently replaced your cabinets, make sure a claim will cover the new ones, not the 30-year-old cabinets that were there when you first [purchased the policy],” Qu says.
You should review your policy if you get married, divorced, or if your spouse passes away. “The policy should have the same names as the title of your home,” says Rosa Mejias, exclusive agent at Allstate in Yonkers.
And take a look at your plan when a new baby joins the family, or even a few months before. A new baby can mean new furniture, toys, electronics, and other expenses that might put you over your current coverage limits. If this is the case, consider a rider—an optional addition to your homeowner’s policy, which can be used to cover things that aren’t covered by your standard home policy, according to Trapani. A money-saving trick? Bundle. Some insurance companies will allow you to purchase bundles for a discount on your home and auto insurance, per Shaw.
No matter what is going on in your life, homeowner’s insurance does not stop at the end of your driveway. It should be reviewed on a regular basis, especially if any life-changing events have occurred. And if you’re unsure about whether changes should be made, don’t be afraid to pick up the phone and call your agent to discuss them.