Set it and forget it? Homeowners insurance is not that easy. Your insurance portfolio is more like maintaining a car—you need to regularly change your oil or periodically get a tune-up. Similarly, life changes could require tweaks to your insurance policy.

Updating your homeowners insurance coverage

The personal property coverage, or contents coverage, for a homeowners policy is a default percentage of the dwelling limit (known as Coverage A) on your declarations page. Discuss this limit with your agent as it compares to the appraised value or market value of your home. In this fluctuating real estate market, you may need to adjust this coverage before you have a claim. Otherwise, instead of saving money, you may find yourself with a claim that your policy does not cover.

I see many policies that have not been reviewed in a number of years, resulting in an insufficient dwelling value. The worst time to learn your homeowners insurance isn’t sufficient is at the time of claim. It’s not your agent’s responsibility to make sure you read your policy.

To avoid these problems, discuss with your agent the dwelling value and its replacement cost. If you have renovated your kitchen or bathrooms, make sure you talk to your agent about the value you invested in these upgrades, and hold on to all receipts associated with the renovation.

How to appraise your belongings

If you own a condo, co-op, or townhouse, your policy is usually dependent on the estimated value of your possessions. But even if you do not fall into those categories, it is a good idea to keep an updated and accurate list of your belongings for insurance purposes.

Certain valuables such as jewelry, furs, electronics, and silverware should be scheduled on your policy, depending on their value. This way they will be covered while you are away from home or if they are lost, stolen, or misplaced. In order to be reimbursed, you will have to prove their value by way of a receipt or an appraisal. Check with your agent for the insurance company’s requirements at the time of a loss.

Gadgets, toys, and electronics

With new technology comes great responsibility. We want the latest and greatest in electronics, gadgets, and toys, but these impulses and indulgences can be costly. You’ll need to add these gadgets to your insurance policy if you want them to be covered.

Your policy will cover new possessions you may acquire; however, I strongly recommend and encourage you to keep all receipts, photos, and/or video of large and expensive items in a safe place, preferably online via cloud computing. Insurance companies don’t write blank checks, and they will require you to substantiate any large purchases you claim.

Do note that some carriers are no longer covering the loss of smartphones and tablets. These carriers are just not interested in maintaining the expense of a claims department when it comes to items that are under $1,000. Talk to your agent about what types of electronics your policy will cover.

When reviewing your insurance portfolio, consider what could result in a true financial hardship for you and your family. Then discuss with your agent how insurance can accommodate and alleviate that hardship. Be realistic and reasonable. Always keep in mind that if you are trying to avoid any out-of-pocket costs by submitting a claim, you’re probably looking at higher premiums next year.

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Linda Rey is a licensed insurance agent at Rey Insurance with a broad spectrum of expertise in life, accident, health, property and casualty insurance as well as retirement planning and college funding strategies.

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