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SALT LAKE CITY — The spring thaw often brings thoughts of spring cleaning and home renovation. Planning for the future, although very exciting, requires homeowners to stop and make sure they are covered — every step of the way.
Because it is true that thoughts of insurance can bring the negative to mind, many people forget to consider insurance when things are moving in a positive direction. For example, many people don’t think about insurance when they are planning renovations that will raise the value of their home.
Here are five things to keep in mind:
Home Upgrade
Remodeling your kitchen or bathroom, adding an extra room and upgrading other features in your home may add substantial value to your house. Before the work begins, check to see if you need to increase your insurance coverage. This way the addition or upgrade will be covered in case it is damaged or destroyed during construction.
Also, if you have installed a new roof or upgraded your electrical or plumbing systems you might get a reduction in your premium. These improvements can reduce the risk of damage to your home.
Home Inventory
If you don’t have a home inventory already, it is time to create one. A home inventory is a list of all of the things that you own, with a description of each item. Also include where you bought it and how much it cost as well as the make, model and serial number for major items. If you have receipts, attach those and keep a copy of the inventory in a safe place (like a safe-deposit box at a bank). That way, you can access the inventory if the copy at your home is somehow lost or damaged.
Home Value
It may be time to re-estimate what it would cost to rebuild your home. The estimate should cover construction costs, but not include the price of the land.
To determine the ballpark amount, first contact a local building association or real estate agent and ask them for the current construction cost per square foot for homes in your community. Take that number and multiply it times the number of square feet in your home. That figure will give you an idea of whether you have sufficient coverage to rebuild your home at the curret cost of construction, if it is destroyed.
Liability
Check the liability coverage on your homeowner's or renter's policy to make sure it is adequate, especially if you’ve added amenities such as a swimming pool or a hot tub. This may also be the time to consider taking out a personal umbrella policy for additional liability coverage.
New Valuables
If you’ve acquired new valuables such as jewelry or expensive pieces of art, check your policy. It could have a limit on the amount that will be covered for these types of items, and you may need to add an endorsement to cover the value of any additional acquisitions.
When it comes down to it, each homeowner is responsible for making sure their home is adequately covered. Although agents can advise, there is no way for them to know if a home’s value has increased unless they have been informed.
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*Rolayne Fairclough handles media relations, government relations and community involvement for AAA Utah.**
