It’s highly important to review your insurance coverage on a regular basis so you can be sure your coverage keeps pace with the cost to repair or rebuild your home and replace its contents, including any upgrades you might make over time.  While this could lead to higher premiums, it helps you to be more adequately insured and less vulnerable to high out-of-pocket expenses.

Here are some of the things that can affect your insurance and the premium you pay:

  1. Home remodeling

    Since you’ve moved into your home, you may have remodeled the kitchen, updated the bathroom, or made other improvements. If you have added to the value of your home, make sure your homeowners insurance coverage takes these new improvements into account. It’s expensive for you to build, and it’s expensive for the insurance company to rebuild in case of a loss. Materials and construction costs will be taken into consideration and it may increase your premium, but at least your coverage will be up to date.

  2. Pools and Trampolines

    Your backyard pool may be relaxing and the trampoline fun for the kids, but they can also cause your insurance premiums to increase. You may be liable if people are injured while using them, whether you gave them permission or not.

    Keep your pool secure with fences, install self-locking gates, and keep safety equipment readily accessible. Consider putting a net around your trampoline to reduce the chance of injury.

  3. Age of house and roof – and materials

    As your home and roof age, they could become more susceptible to damage from weather elements or even internal deterioration. Replacement costs, including material and labor, go up over time.

  4. Wood-burning stoves

    If you have a wood-burning stove, you could limit potential premium increases by providing your insurance carrier with proof your wood-burning stove was installed by a licensed contractor and meets code requirements.

    Install smoke detectors on all levels of your home. Additionally, keep a fire extinguisher in an easily-accessible location and make sure everyone in the household knows how to use it.

  5. Home-based businesses

    If you work from home you may need coverage for equipment and electronics, business vehicles, and inventory stored on site. Standard homeowners insurance may provide some protection for business equipment, but coverage varies by policy and may not be enough. In addition, having customers coming in and out of your home can present liability and property loss risks that homeowners policies may not cover.

  6. Home security and safety

    Home security systems may help reduce your premium plus add an extra layer of protection for you and your family, your home, and your belongings.

    Replacing old locks with new systems (including deadbolts), along with installing and activating a monitored home security system, could reduce your homeowners insurance rate.

  7. Dog bites

    Certain insurance companies may not insure homeowners with certain dog breeds; be sure to check with your insurance company. Be sure to check local and state rules regarding dog bites and insurance coverage.

  8. Previous claims
    The more claims you have, the higher your perceived risk to insurers. This can not only lead to higher premiums but also the risk your insurance company may drop or not renew your policy.

What you can do

Contact your insurance agent and review your coverage every year. In addition:

−    Consider combining your policies. Many insurance companies offer discounts for bundling policies.

−    Purchase umbrella liability insurance to protect yourself against claims that may exceed your current coverage limits. Umbrella policies generally offer $1 million or more in additional coverage at reasonable rates.

Empower yourself with financial knowledge

We’re committed to helping with your financial success. Here you’ll find a wide range of helpful information, interactive tools, practical strategies, and more — all designed to help you increase your financial literacy and reach your financial goals.

My Financial Guide