Spring Cleaning for Home Insurance: Three Things to Consider When Updating Your Policy

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What are the things you need to know when updating your home insurance policy?

It’s every home owner’s nightmare: the water levels are rising in your basement. Only this water doesn’t smell like ordinary water. It smells like it came out of the sewer. But that’s not the worst part: after all the damage is assessed and the situation investigated, it turns out that your home insurance didn’t even cover it. 

Water backup, they called it. That’s different from flood insurance. You thought you were covered; now, failing to read the fine print means you have to deal with a mess that came out of the left field.

It’s all part of the same problem: home owners not taking control of their own homeowners’ insurance destiny, especially at the most critical point: when you’re looking at a policy update. 

3 Tips for Updating Your Home Insurance Policy

A home insurance policy update will feel like homework. Your first tip? This is just a feeling. It’s not as difficult as it sounds, and you’re not getting graded on it. 

However, it’s important to know where you should be covered. About 6% of insured homeowners filed a claim in 2018, for example. That’s approximately one house out of every small neighborhood. Who’s going to file the claim this year? Will it be you? There’s no way to tell. But if you take the following tips in mind, you’ll have a much better chance of being covered if it does end up being your house with the damage to deal with:

Tip #1: Read, Read, Read

In the example above, you saw how one mis-read of the flood damage insurance can leave a total gap in coverage. Simply put, you don’t know what you aren’t covered for. The first step is to read your homeowner’s policy and see what’s written down. Remember: anything that isn’t there…isn’t covered.

You should also take an approach to active reading. That means asking questions. Underlining what you don’t understand. Following up with research if you don’t know what “water backup” coverage is in the first place, for example. Don’t just read it through with the intention of signing on the dotted line. That doesn’t accomplish anything. Take one sitting, go through the language in your homeowner’s policy, and figure this out.

Does it sound like a lot of work? Remember: once you sign up, you’re done this step. And you’ll have a lot more peace of mind when you know exactly what you’re signing up for.


Tip #2: Target Your Coverage to the Biggest Risks

If you live in Iowa, it’s pretty fair to say you won’t need hurricane coverage. That’s an extreme example of a powerful principle: you should evaluate the risk to your home fairly and accurately, and only apply for the sort of coverage that could realistically matter to you down the line.

To take our example, having a water backup is potentially a problem if you have a sump pump on your property. In that case? You’ll want to make sure that you have the appropriate coverage. 

Do some research and find out where your biggest risks are. This will help ensure that you’re covered for the most likely events. You will need to know exactly what the insurance company near you perceive to be the most dangerous insurance risks.

Keep in mind that there may be different aspects to specific coverages, depending on your risk. For example, hurricane coverage in the southeast can have different languages for different types of hurricane damage. And that’s where you’ll have to step in and make sure you have the coverage you need.

Tip #3: Take a Home Inventory

If there’s damage to your home, it means there’s also damage in your home, most of the time. Many of the home insurance claims come down to being able to prove what kind of damage was done. So keep track of your most valuable items! Document them so you can prove what was damaged in the case of a flood, for example. Take pictures of the damage. Log everything you can and store the files securely. You’ll be glad you did when it’s time to file a claim.


Understanding Your Home Insurance Policy

Details for updating your home insurance policy

Insurance companies aren’t always how people view them. Many people sign up for insurance believing that it’s like a subscription service—pay a certain amount a month and you no longer have to worry about one major aspect of your life. But it’s important to read the fine print. 

If you ever have a home insurance claim to be filed, it means that you’re potentially at odds with an insurance company. Their responsibility is to pay you out, and their responsibility is to ensure they’re not being defrauded. No insurance company is in the business of losing money. And for that reason, they may be tight with certain restrictions, making it more difficult for you to get the most out of your home insurance policy.

Leaving your house unoccupied for quite some time, using your home for business and renovating your house are some of the factors that can invalidate house insurance.

The good news: if you know how to document every aspect of a claim and you keep good track of what your policy entails, you’ll understand why the old phrase “knowledge is power” is so important in the world of home insurance.

About the Author

Galen M. Hair, Owner of Insurance Claim HQ, is a property insurance attorney operating in more than seven states including Alabama, Louisiana, Texas and Georgia among others. Galen and his team have helped over 800 families rebuild their homes and businesses. He has been rated a Super Lawyers Rising Star, and voted one of National Trial Lawyers Top 100. To learn more about how Galen and his partner, Alexander Shunnarah, can help protect property from disaster, please visit: https://insuranceclaimhq.com

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