At this life stage, young families often take the big plunge into home ownership – a step that instantly requires you to get smart about home insurance.
- If you are purchasing your first home, or reviewing a new homeowners policy, remember that you only need to insure the home itself and your possessions – not the land your house sits on. Thus, you should expect that the insured value of your home will be less than the market value.
- Growing families often find that their ‘starter home’ needs improvement. Be sure to alert your insurance company when making any major home improvements – usually anything over $5,000 – as you will want to update your homeowners insurance policy to reflect the new enhancement and prevent being underinsured.
- In maintaining your residence you must realize that you are liable for things that happen on your premises. Keep in mind that in many states you could be held legally responsible for the actions of anyone who drinks in your home and then has an accident in your house or after leaving it. Your policy should protect you against lawsuits due to these types of liability issues.
- Also as you install backyard items for your active kids – swing set, trampoline or swimming pool – inform your insurance company. These items may require you to increase your liability coverage through an umbrella policy that protects you in the event that someone is injured while on your property.
- As you acquire more valuables – jewelry, family heirlooms, antiques, art – you might want to consider purchasing an additional “floater” or “rider” to your homeowners policy to cover these special items. They’re typically not covered by a basic homeowners or renter’s policy.
- Finally, we all know that raising kids can be tough on your budget. One way to keep your yearly premium costs down is to consider increasing your homeowners deductible. Bear in mind that raising your deductible increases the out-of-pocket costs you will have to pay in the event of theft or damage to your home.