If you think of a Peloton or a trampoline, also think of insurance | way of life


Have you recently received a letter from your county assessment office? You know the one. It lists the estimated market value of your home so you can (swallow) prepare for your property taxes. Whether your home has increased or decreased in value, it might be a good time to review your home insurance policy as well.

While your coverage may have kept pace with rebuilding costs in the event of total loss, have you made any upgrades or purchases, such as an above ground pool or trampoline, since your last conversation with your agent? Sure, these purchases seemed like good ideas at the time, making your home more livable or your yard more conducive to socializing, but they can also lead to higher home insurance costs.

People assume their policy covers everything, but it has its limits, says Carole Walker, executive director of the Rocky Mountain Insurance Information Association. “You have to know what is covered and what is not because it can come back to haunt you,” she says.

Insurance rates are based on the cost of replacing a home – the amount it would cost to rebuild your home in the event of total loss. A policy also covers the contents of your home and provides protection against claims if someone is injured on your property.

Before you take any steps to improve your home or add a “fun” element, like a fabulous “shed,” think about how that might affect you financially. Is the change covered by insurance? Is it dangerous? Will this affect the value of your property? Will it increase the risk for you? This type of upgrade, says Walker, is “not necessarily a bad idea. It can simply have financial consequences.

What you don’t want to do is keep your insurer in the dark, says Michael Barry, spokesperson for the Insurance Information Institute. “Insurers look favorably on homeowners who proactively reduce the risk to their property and notify them in advance of any major purchase or improvement,” he says.

There are three types of increases your purchases can trigger.

1. Replacement cost

Any home extension, like an extra bedroom, entertainment center, backyard kitchen, screened porch, or finished basement, is going to add to the value of your home as it increases your usable square footage, says Barry. Exterior structures, such as a large finished patio or furnished shed, are viewed in the same way as additional bedrooms when it comes to increasing coverage.

The same goes for major home improvements, such as replacing the carpet with hardwood floors or laminate countertops with granite. Remember: if it was expensive to build, it would be expensive to rebuild if lost. Insureds who are underinsured could face reimbursable costs.

2. Content coverage

According to Kenton Brine, chairman of the NW Insurance Council, the more money you put into an item, the more money it will take to replace it. While the contents of your home are covered as a percentage of your insurance policy, you may need to increase your overall coverage or purchase a rider – additional coverage – for expensive personal effects.

“A $ 1,500 road bike can be covered, but a rad $ 6,000 electric bike cannot,” Brine says. The same goes for high-end golf clubs, art, an ergonomic office chair, a Peloton-type exercise bike, a Pilates tower or new sleek and chef-grade machines, grills and grills. exterior or fireplaces. A basic jumper to make sure new treadmill or office equipment can cost as little as $ 25.

3. Liability

Bigger purchases to entertain you and your family are the ones that can make your home riskier in the eyes of insurers. Insurance companies call such purchases an “attractive nuisance,” which means you have something that might entice children (and adults) to enter your property. If people are injured, you can be sued, even if they gained access to the equipment without your permission. Think swimming pools, trampolines, treehouses, play equipment, archery ranges, homemade ice rinks or skateparks, a floating dock at the water’s edge with a slide or even a serene koi pond. Another potential liability risk: a pandemic puppy. Right or wrong, insurers don’t look favorably on certain dog breeds, and adopting one can increase your premiums, Barry says.

Before you buy, talk to your insurance professional, says Walker. And if you’ve already made the purchase, talk to your insurance professional. Ask if it is included or excluded from your policy. Your agent may also be able to tell you what city or state (and your insurer’s) imposed safety measures you can take to minimize liability, such as adding a fence around a swimming pool or a safety net around a trampoline.

“Find out what your policy covers in the worst case. Is this sufficient coverage and is it the correct coverage? Ask your agent what’s excluded and ask yourself what personal property you need to protect if someone takes legal action against you, ”says Walker.

“If you’ve added or are considering an expensive pool, trampoline, or exercise equipment, contact your insurer as soon as possible, as each policy treats it differently and you won’t know until you ask,” Brine says. .

Then decide if you want additional coverage. If you’re worried that someone will sue your assets due to personal injury or property damage, you may want to consider an umbrella policy, says Brine, which offers additional liability coverage that helps you pay what you owe. if you are sued for damages and have exhausted all other auto or home insurance policies. You get what you pay for with these policies; depending on where you live, says Barry, a master policy with $ 1 million in coverage costs between $ 150 and $ 300 per year.

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