When was the last time you evaluated your homeowners insurance? Have your needs changed since you initially purchased your homeowners policy? If so, there may be gaps in your insurance coverage. For example, you may have acquired valuable possessions that require extra coverage, or you may have made some home improvements that have increased the value of your home. How might this affect your finances in the event that you need to replace your home and its contents due to unforeseen circumstances? Here are some tips to keep your insurance up-to-date:

• Be familiar with your homeowners policy. Read your policy’s provisions, limits, and exclusions, and contact your insurance professional with any questions. Set up a meeting to analyze any potential homeowner risks that may be applicable to your particular situation.

• Regularly assess your cost to rebuild. If you had to rebuild your home and replace its contents, would you have enough insurance to cover the rebuilding and replacement costs? Be sure to regularly assess your cost to rebuild, including your personal possessions, so that you can adjust your insurance coverage for appreciation, rising construction costs, and home improvements.

• Check community building codes. Sometimes, a damaged home can’t be reconstructed exactly as it was without violating current building codes. For instance, the home may need electrical rewiring or special windows due to updated safety or energy codes. Knowing about these potential expenses in advance can give you time to obtain the necessary insurance protection to cover the extra expense.

• Keep an updated home inventory. Documenting your possessions, both on video and on paper, may prove invaluable should you need to file a claim or replace your home’s contents after a disaster. Update this inventory yearly to include all new possessions. Also, be sure to store extra copies in a safe place outside your home.

• Evaluate your liability exposure. Does your homeowners policy offer enough liability coverage for your needs? A personalumbrella policy may be a worthwhile consideration. Umbrella policies provide excess liability coverage in $1,000,000 increments and apply to situations that your current policies might not cover.

Parting Thoughts

A homeowners insurance policy can help you and your family avoid devastating financial loss as a result of damage to your property. It can help you prepare for expenses you otherwise might not be able to afford. Keep your policy current and appropriate to cover home improvements or the acquisition of high-value possessions. Failure to maintain appropriate coverage may result in your sharing a greater portion of a loss than you had expected.

Although insurance originated over 3,000 years ago, it has evolved throughout the centuries to keep pace with society’s needs. Conduct a regular review of your homeowners insurance coverage to help it keep pace with your needs.

Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by Liberty Publishing, Inc.

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