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The problem with most of us is that once we have bought a home insurance policy, we do not seem to bother about it for the next many years, unless, of course we have to file a claim, etc. When we buy an insurance policy for our home, it is imperative that we review the policy every now and then. This is because, our homes appreciate over time as well as the fact that there are many new insurance companies who have been established offering much more lucrative terms and benefits. For example, if you had made a home insurance policy for your home, which at the time of purchase was $100,000, it is quite likely, that the same home is now worth $130,000. So, based on your earlier home value, your policy is highly inadequate. What are the aspects you need to check in your current coverage of home insurance? Here are some pointers:
Coverage type: Have you covered the home along with the building or just the contents?
Coverage amount: What is the value of the home that you have declared in your home insurance policy?
New acquisitions: Have you included the new expensive items that you purchased in the course of the past few years, in your policy?
Environmental record: Did you know that any increase in the number of thefts or burglaries in your neighborhood could mean an increase in your premium?
Have you made any major renovations? Any major renovation to the property could invalidate your insurance claim.
If you are reviewing the type and amount of coverage which the existing policy covers, check the full coverage plans. Usually policies offer protection against fire, flood, damage caused by storm and theft. There are many policies which offer coverage against accidental damage also. If you not too sure, it is best to check with your insurance company. When you insure the contents of your home, remember you can insure all the contents, including carpets, upholstery, etc. This obviously will vary according to the size of your home and the area where you live in. You can get coverage of up to $50,000 for the contents of your home. Incidentally, kitchen cabinets are also classified under ‘contents’ and so does laminate flooring. Items like jewelry, objects of art, expensive paintings require separate policy. Many companies today ask for a list of inventory of the items you wish to be insured. If you get an old-for-new policy, your damaged goods like washing machines, etc may be replaced by a new one, which is of equivalent value. Remember when you insure the contents of your home, always mark the replacement value against each item and not the amount you had paid originally when you purchased it. Any expensive item which you have purchased since the time you bought the insurance policy must be included. Talk to your insurance company, and add them to the policy. In case your neighborhood has recently witnessed a spate of crimes, burglaries, etc, you might find that your insurance premiums have increased. In this event, it is prudent to shop around for another insurance company which is offering you more affordable rates. Similarly, before you undertake any major renovation in your home, like removing a wall, etc., you must first talk to your insurance company, or else, you might find your claims getting invalidated.
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