Protecting Your Dream

June 30, 2015

Years ago, I had a wonderful friend who grew up like me as an “apartment kid” in New York City. This fueled her desire as an adult to own her own home. With a lot of work and relocating to an area where the home prices aren’t ridiculous, she was able to live out her dream of home ownership. Like many of us, she got the homeowner’s policy she was given and never questioned the policy or asked questions.

She also made several expensive upgrades to make her house her home. When her house burned down years later, her lack of knowledge of her homeowner’s policy cost her thousands of dollars in lost reimbursements. The insurance carrier refused to cover her upgrades since she failed to tell them. Any changes you experience in your home should be discussed with your insurance company. I listed seven of them below:

  • You have a child in college. Check with your insurance carrier to see how much of your child’s stuff is covered when they’re in a dorm vs. an apartment.
  • You made significant home improvements. Contact your insurance company to make sure your upgrades are properly covered in the event of a loss.
  • You made home improvements like adding a security system or storm shutters. These types of improvements may reduce your rates.
  • You bought a new pet. Notify your insurance carrier to make sure that your pet is not on the “restricted breed list” that could make you ineligible for coverage. You also want to check to see if your policy has a pet restriction.
  • You are getting married. Contact your insurance company to update them of the new jewelry to make sure you are covered.
  • You make a new large purchase. If you buy a new TV or computer, contact your insurance company to update them about your new purchases.
  • You have a new roomie. This could be a new spouse, parent or an adult child. Contact your insurance company about your additional housemates to ensure everyone’s things are properly covered in the event of a loss. If you are renovating your home for an elderly parent, inform your insurance carrier because some will not insure additions that they are not aware of. If you have paid home care for your parent, you may need to contact your insurance carrier about additional liability and in some cases, worker’s compensation.

However, don’t just wait for one of those events. Do an annual review even if only to make sure that you are properly insured. This can go a long way to preventing your dream from becoming a nightmare.