This post was created by our partners at Hippo Insurance. Need help sorting through your coverage options? Hippo is making it easy to save up to 25% on home insurance (plus you can get a quote online in 60 seconds or less)!
Choosing the right homeowners insurance for your family isn’t a ‘set it and forget it’ process. In fact, experts recommend that you reevaluate your coverage on an annual basis to make sure you’re fully protected and getting the best rates possible. And, since most homeowners let their policies auto-renew year-after-year, more than 60% of homeowners are underinsured.
As we head into a new season, now is the perfect time to catalogue any changes in your home and double-check that your plan is evolving with you. But where do you even start? How do you know if you’re underinsured, paying too much, or right in the sweet spot?
Fear not—we’ve got your back. To get started, ask yourself these five questions to assess your home insurance policy:
As parents, you know that a lot can change in a few months. But, ask yourself what your home insurer may be interested in hearing about. Did you finally start that home business? Welcome a new baby? Remodel the bathroom? Get a dog? Get two dogs? (C’mon, he needs a buddy!) From family heirlooms to furry friends, your possessions and circumstances can directly impact the coverage you need. Each year you should take inventory and evaluate what’s covered under your current policy. Be sure to differentiate between the actual cash value of your belongings (which includes depreciation) versus the cost of replacement—you should be covered for the latter.
Don’t forget to survey any improvements made to your home or safety measures you’ve recently added. Simple actions like installing a security system or investing in smart home technology could reduce your premiums by up to 15%.
Am I exposed to the elements?
Among the most common reasons for home insurance claims are damage due to wind, fire, or water. If your home is located in an area prone to natural disasters, this annual assessment is a great time to examine your readiness. You may be eligible for a lower premium if you’ve installed storm shutters, repaired or replaced roofing materials, or recently updated your heating, plumbing, or electrical systems. Likewise, if you’re home is located in close proximity to a fire station or fire hydrant, that can help reduce your insurance costs. Make sure this information is addressed within your policy and that you’re taking advantage of every discount available to you.
What if I had to start over?
Most of us prefer not to entertain the idea, but it’s important to know where you’d be in the unfortunate event that you had to rebuild your home from square one. Your existing policy may cover your home’s appraised value based on current supply and demand, your location, and comparable home prices. But to be fully covered, you should insure your home based on its replacement cost—i.e. how much it would cost you to rebuild and replace the entire home and your belongings.
To understand your home’s replacement costs, start by considering the following factors:
- Age and quality of the home
- Size, layout, and square footage
- Local building costs
- Interior and exterior home features
- Building materials
You can use online calculators to understand your basic replacement costs. Keep in mind that your policy’s built-in inflation provision may not be enough to account for rising building costs in your neighborhood. Bottom line: your coverage should be enough for your family to start from scratch if you had to.
While making sure your property and possessions are protected is crucial, it’s not the full picture. An essential element of your policy is making sure you’re covered should an accident or injury happen in your home. Many policies include $100,000 in standard liability coverage, but that’s rarely enough to cover all the expenses you could incur should an unforeseen accident occur. And if you have a pool, hot tub, trampoline, or even a dog, your plan’s basic liability protections may fall short in covering incidents related to those assets.
Whether you have “red flag” items in your home or not, you may want to consider an umbrella policy to supplement your liability coverage. Umbrella policies kick in after your maximum liability insurance is reached on your home or auto insurance policy, for major accidents or potential lawsuits stemming from an accident on or off your property in which you’re held personally liable. With birthday parties, play dates, and neighborhood potlucks all happening under your roof, your peace of mind is priceless.
Am I paying too much?
If you’re like most people, you ask yourself this question more frequently than once a year. Not all home insurance policies are created equal, so use this check-in to do your research. If you’re unsure about the quality of your coverage, shop around for a company that meets your needs at a price point that works for you.
Though you can’t control every factor affecting your insurance costs, making small improvements and investments to lower your risk profile could earn you big discounts on your premiums. Purchasing high-tech home safety gadgets, doing some DIY projects on the weekend to update your home, or not filing a claim in several years can all make you eligible for additional discounts, ranging from 5-20%.
Lastly, if you’re unhappy with your current premium, consider opting for a higher deductible that can lower your monthly payments. And pay close attention to the terms and conditions before committing to a policy.
Need help sorting through your coverage options? Hippo Insurance is making it easier to save up to 25% on home insurance, You can get a quote online in 60 seconds, or less time than it takes to unbuckle a car seat. Contact a Hippo Specialist, who are all licensed agents, to learn more—they’re here to help!