Your home may be the largest investment you make in your lifetime, and keeping it insured properly is vital. If you took out a good policy when you purchased your home and have been lucky enough to not have to file any damage claims, then you likely don't think about it often other than when you pay your monthly policy installment. While you shouldn't have to think about your policy every day, you should keep it in mind anytime there are changes to your home or living situation that could affect the coverage you need. Here are two instances when it is vital to contact your property insurance company to notify them of changes in your living situation or home.
1. Before Renovating your Home
If you decide to upgrade your home by investing in a new roof or adding that additional room you have always dreamed of, it is important to make a phone call to your property insurance company before you start. Why? You don't have to ask for their permission, but instead for their protection during the renovation. Remember that disaster could strike when you are in the middle of building that great new room, and if you don't notify your property insurance company before you begin the new project, your current policy may not cover the loss. When you notify them before you begin the building process, your investment in the project is protected, whether it is finished or not.
Then, once the project is finished, be sure to have your property value promptly re-appraised to reflect the changes you have made. You can then ensure that if your home were to be destroyed in a disaster, the value of it after the addition or renovation is taken into consideration, not the value before it was added.
Some home renovations can actually cause your property insurance costs to drop even when they increase the value, which is savings you don't want to wait to take advantage of. For example, if you have a new roof installed on your home, your insurance rate could drop by as much as 20 percent. This is because a quality roof protects your home and belongings in the case of a natural disaster.
Other upgrades may require the need for an increase in your liability protection, such as the installation of a new pool. This liability protection is very important, though, because if a guest becomes injured in your pool, you don't want to have to pay out-of-pocket for their medical expenses if they were to sue you. However, if you contact your insurance company before beginning your pool plans, they can advise you on ways to keep your rates low, such as ensuring the pool is not visible from the street.
2. When You Decide to Rent out a Spare Room
If you have a spare bedroom, then renting it out to a friend or student attending a nearby college is a great idea to make some extra cash. You should notify your property insurance company before the renter moves in, but if you forgot and already have a renter, then it is not too late to update your policy. While you may be weary of notifying the company due to thinking it may raise your rates, surprisingly, they typically won't go up.
Notifying the company benefits you, because if something happens to your home that makes it unable to be occupied, such as a natural disaster, property insurance companies in many states may pay you the rental income that you are missing out on while your home is being repaired. It is important that you and your renter both sign an official lease and send a copy to your insurance company to obtain this benefit. Every time a new lease is signed after the last ended, be sure to send a fresh copy, as well.
Also, the agent can check into your current liability insurance to make sure the current coverage limits are enough to cover the medical bills if the renter becomes injured on your property. Whether renting a room out or not, it is always important to have proper liability insurance, because anyone who becomes injured on your property (including your yard) could sue you.
What your policy typically will not cover is the renter's belongings, so inform your renter that he or she needs to take out a renter's insurance policy to cover anything they keep in the house. Also, if you plan to allow the renter to bring their dog into your home, make sure to report it to your insurance company, as well. This should not affect your policy rate unless it is one of certain dog breeds that can raise your rates.
While your homeowners insurance policy isn't something you should have to think about every day, you do need to know when you need to contact your property insurance company to notify them of important changes in your home. Keeping the company informed of these changes protects the largest investment you may make in your lifetime, and some changes may unexpectedly lower your rates or provide you with an unexpected advantage. Contact a company like Harris Insurance Services for more information.