Will Your Old Insurance Policies Work in the New Year?

By Diane Tait

Image by Public Domain Pictures

While most adults would never consider taking a prescription medication that has passed its expiration date, it’s not at all unusual for them to stick with an insurance policy that is past its prime.  Just as your health changes from year to year, so do many other aspects of your life.  Since an insurance plan can only effectively protect you and your family so long as all the coverage adds up to reflect your current financial status, scheduling a yearly insurance review can be just as important as having a yearly checkup.

How much of your home does your homeowner’s insurance protect?

If it hasn’t been reviewed and updated for more than a couple of years, then you could wind up finding out the hard way that you don’t have enough protection to replace your home should it be destroyed by a fire or a major storm.

1.      This is particularly true if you have added a room or have redone your kitchen, bathroom, or even enclosed your patio.  Obviously, the same rule applies if you just added a swimming pool or a garden shed to your property.

2.      Even upgrades to your heating and air-conditioning system, electrical system or plumbing could make your old insurance obsolete.  If you just added a sprinkler system to your yard or fire sprinklers to your home, you should get a new quote. If you have upgraded your home security system, you could even qualify for a discount.

3.      Even adding a new pet to your household is reason enough to give your insurance agent a call, especially if we’re talking about a dog.

4.      When is the last time you had your house’s value assessed?  Since the replacement value quoted on your policy needs to reflect your home’s current value, if property values in your neighborhood have gone up, you need to get a new quote.

5.      If you’ve recently acquired valuable art, jewelry, collectibles, or just bought new living room furniture, its time to discuss your homeowner’s coverage with your agent.

6.      If you currently don’t have flood insurance, you might like to get a quote, considering Florida gets more thunderstorms, tropical storms and hurricanes than any other state in the Union.  (Your homeowner’s policy doesn’t cover flood damage.)

The Business of Business

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One of the things many homeowners don’t realize is if they run a business out of their home, their homeowner’s policy isn’t going to cover business liability, business-related property damage, or losses related to business equipment. 

1.      Business liability is a big deal in the US.  If you see clients in your home, you need to consider adding an umbrella policy to cover potential liability issues.  

2.      If your business uses a computer and printer, a copier or high-priced photo and/or video equipment, chances are these items aren’t covered on your homeowner’s policy. 

3.      Cybercrime is big business in the US.  If you do business online or simply keep records of your customers credit cards on your computer, you are liable should your computer be hacked.  Not only will you be expected to pay for any losses incurred by your clients, you could also be sued in court.  The court can even force you to pay an independent auditor to conduct an expensive forensic investigation to determine what was compromised.  Even worse, you could open for business one morning to find out your business devices have been hijacked by ransomware.  If your business relies on the security of your data, you owe it to yourself to talk to your agent about cyber insurance policies that are designed to help you ride out the storm should online pirates target your small business.

Are You a Landlord?

Until recently, being a landlord meant owning multiple dwellings, some of which were rented out on a monthly basis.  Today, the term can also be applied to homeowners who rent their home or even a room to guests on as short as a nightly basis.  Since the advent of sites such as Airbnb, anyone can be a landlord.  While picking up some of your mortgage payments might seem like a boon, if you’re not careful, renting to strangers can cause you to go bust.

Image courtesy of PxHere

      1.      Particularly if you rent your fully-furnished home, there is always the possibility a renter can cause damage to or remove items from your home.

      2.      It isn’t unheard of in the short-term rental business to come home to find property vandalized or a dwelling cleared out completely.

      3.      Your homeowner’s policy isn’t enough.  In fact, if you read it you will in discover what are known as business activity exclusions.  This means if a renter or paid guest burns down your property or does any damage to it, your claim would be denied.  If you want to start renting, you need to look into renter’s insurance.

      4.      In addition to damage, you also need added liability coverage, since that’s also an exclusion.

      5.      While some online rental portals like Airbnb offer third-party liability insurance coverage, if you’re thinking about going this route, make sure you have your own insurance agent look over the terms, conditions, coverage and exclusions.

      6.      The last place you want to find out that your insurance coverage is insufficient is when you wind up in court.

Is Your Auto Policy on Auto Pilot?

The only reason most people compare auto policies is to shop for a better price.  But price shouldn’t be the only factor used to determine coverage.

     

Image courtesy Pixabay

1.      If you’ve been driving the same car for the past few years, while your driving might be the same, your financial situation may have changed.  If you’ve been promoted, have received an inheritance or have hit the lottery, these factors make you much more vulnerable to being sued for greater amounts should you be involved in an at-fault accident.  If you haven’t discussed your financial situation with your agent in a while, chances are he or she could advise you to increase your limits to cover your assets.

      2.      Make sure you have uninsured motorist’s coverage.  While you can save a few dollars per month by eliminating this coverage, should you be involved in a collision where the other driver has no insurance, you will regret not being covered. 

      3.      If you want to reduce your monthly bill and have an excellent driving record, consider increasing your deductible. 

At this time of year, everyone is always looking to make New Year’s Resolutions that can help them make the coming year even better than the current one. Having your insurance policies reviewed every year can be a great way to ring in the new year.

Diane Tait owns and operates A&B Insurance.  To find out more about how you can save money on renter’s insurance, go to her site or fill out the form at right.