Home Improvements:
Filling the Gaps with Insurance

A lot of time and energy goes into adding a deck, a new bathroom, or that spare bedroom you’ve always wanted. You have to have patience in deciding on the new look you want, as well as in seeking out the right contractor or friend to help you with the job. In the excitement of the project, you may overlook updating your insurance coverage.

It is understandable that you may forget to review your policy. However, you should be aware that additional insurance coverage may be necessary if you remodel your home. Your homeowners policy will likely cover any property damage resulting from your own improvements, the work of a friend, or the work a contractor performed. Liability for the homeowner is generally covered, regardless of who did the work, but coverage for additional parties alleged to have been negligent (such as a contractor) is likely not covered by the homeowners policy. It is important that any contractor you hire for your remodeling project has liability insurance, just in case a wall comes tumbling down or someone takes a serious fall. You should be sure to obtain a liability insurance certificate from all contractors as proof of this coverage.

Updating your insurance is more than just protecting yourself in case something goes wrong while the work is in progress. Additions will result in the replacement value of your home increasing, necessitating additional insurance coverage. Remodeling will also likely increase this value, but not always. For example, if you replace a roof, it generally will not change the replacement cost of your home because the cost to replace the roof remains constant regardless of the change.

Review Your Coverage

It is smart to evaluate your insurance coverage while your remodeling project is still in a stage of development. Before starting the process, you may want to consider speaking with us to make sure your current insurance policy fits the scope of your remodeling plans. The knowledge that you are covered may help you sleep better in your new bedroom or enjoy that new deck even more.

Create a Fire Escape
Plan for Your Home

Unfortunately, not all fires can be prevented. However, you may be able to prepare for an emergency by developing and practicing an escape plan.

Be sure to include at least two escape routes in your plan, if possible, and designate a spot outside where everyone can gather for a headcount. You may want to assign someone to assist children and elderly family members. They may be at the greatest risk, since they may have the most difficulty escaping on their own and their lungs may be the most susceptible to damage from smoke and fumes.

If a fire occurs, you may have only seconds to react. Preventing potential fire hazards and preparing an escape plan are keys for survival.

Does Your Insurance Coverage Still “Fit”?

As the seasons come and go, many of us reach into our closets only to discover our clothes no longer fit or suit our current needs. If this has happened to you, you’re not alone. Life is constantly changing. Things that may have worked well in the past often need to be “altered” to fit better as our lives and circumstances change.

The same holds true for your insurance. Are your policies still adequate for your needs? If you haven’t reviewed your coverage lately, it’s possible your policies no longer fit your current circumstances. Periodically reviewing your coverage may help you avoid costly insurance gaps. Here are some considerations for the six basic types of personal insurance:

Homeowners Insurance

The largest investment many people will ever make is the purchase of a home. A general rule of thumb is to protect this valuable asset by purchasing enough homeowners insurance to be able to rebuild your home and replace the contents at current replacement costs. Remember, the replacement cost of your home and its contents changes as building costs rise and as you acquire new possessions. It’s wise to periodically review your coverage to make sure it’s sufficient. Even renters should occasionally review and update their renters policies as they accumulate possessions.

Auto Insurance

Your main concern with auto insurance is to keep the liability limits high enough to protect your income and assets if an accident should result in a lawsuit. To save money on premiums, consider increasing your deductibles.

Personal Umbrella Insurance

It’s possible the liability coverage on your homeowners and auto insurance policies may not provide adequate protection in the event you are sued. Personal umbrella insurance provides a layer of coverage above and beyond your primary limits. It is usually available in million-dollar increments, and it is often considered relatively inexpensive compared with its worth.

Life Insurance

Ideally, one should maintain life insurance adequate enough to replace the income of those upon whom the family financial responsibilities rest. A very general rule of thumb is to carry coverage that equals five to eight times your annual income. If you’re the main breadwinner, life insurance may help your loved ones continue to pay the bills and maintain their current lifestyles should something happen to you. Be sure to adjust the coverage as your income increases and as you go through major life stages, such as the birth of a child or retirement.

Disability Income Insurance

Your chances of becoming disabled during your working years are much higher than your chances of dying. Yet, many people do not have disability income insurance, which provides a certain level of income replacement if you are unable to work. Check to see if your employer offers coverage. Being proactive in this arena pays—once you experience major health problems, it may be difficult or impossible to obtain disability income coverage.

Health Insurance

Like most people, you may need only basic health coverage. However, lengthy hospital stays and costly medical treatment may require a major medical policy. If your employer does not provide health insurance, individual and family policies may be available. If you’re temporarily between jobs, you may want to consider a short-term policy.

Take the time to review your insurance coverage to determine the right coverage for you and your family. As you can see, having insurance of the right “fit” is important.