By Ben Moore
As many Americans face months on end stuck at home, some are using their time (and money) to create a change of scenery or upgrade their surroundings. Office equipment purchases are on the rise, and people are tackling more renovation projects than usual.
But expensive new stuff and significant home improvements can leave you underinsured. If you’re considering making changes to your home — or if you already have — it’s smart to revisit your homeowners or renters policy. Here’s how to ensure it covers the new additions.
Tell Your Insurer About Your Plans
There’s a good chance you’re underinsured before you even make changes, according to Don Griffin, vice president of personal lines at American Property Casualty Insurance Association. Talk to your insurer before making any expensive purchases or changes to your home to inform the company of your plans and clarify your policy’s current coverages and limits. If your home costs more to replace after you’ve improved it, some insurers will pay the new expense to rebuild, but “that’s not every policy, and it may not cover everything you need,” Griffin says. He also recommends once a year reviewing what your home insurance policy covers.
>> Plus, from Robert Powell’s Retirement Daily on TheStreet: The Four Ingredients to Living Well in the New Retirement
In some cases, you may need to change carriers to get the coverage you need. Frank Jones, an independent agent and partner at Mints Insurance Agency in Millville, New Jersey, has seen clients switch insurers because an addition wasn’t covered. “It’s in your best interest to have these conversations now rather than to have a claim denied,” he says.
A new desk and computer for remote learning, plus that monitor and chair in your home office will add up and could exceed your personal property coverage limit.
Renters insurance policies cover your stuff, but they have limits too. If you have new electronics or office equipment, check with your insurer to make sure you have enough coverage for them.
Make an Inventory of Your Property
To help you know if you’ve exceeded your policy limits, keep records of what you buy. In fact, Griffin recommends taking inventory of your belongings every year — a written inventory is best, but even a simple smartphone video tour of your home will suffice.
Losing a home is an emotional time, Griffin says. When it’s time to file a claim, “you don’t always remember what you have.” An inventory will clearly show what you had before a disaster and will make the claims process easier.
Add Sufficient Coverage
Structural changes, such as a full kitchen replacement or adding an in-ground pool, will have the greatest impact on your homeowners insurance. But even something as simple as adding a fence can change the value of your house, and if your home’s value increases, so should its dwelling coverage, Griffin says. Otherwise, in the event of