Your Annual Insurance Review: A Guide and Checklist To Ensuring You Are Covered
As a homeowner in Virginia, you've invested in a place to call your own, and protecting that investment is a high priority. Your homeowner’s insurance policy is one of the most important forms of financial protection you have, and an annual insurance review is crucial in making sure your policy is up-to-date and has the coverage you need.
A lot can change in a year, from the value of your property to major life events. Taking a moment to review your insurance policies can help ensure you have the right coverage, avoiding costly surprises down the road. At NNINS, we’re here to guide you with a comprehensive checklist for an annual insurance policy review.
What Types of Insurance Should You Review?
Homeowners insurance is probably top-of-mind for most people while reviewing policies—however, a full review of insurance should include all of your policies to ensure every aspect of your life is properly protected. This includes:
When & Why You Should Review Your Insurance Policies Annually
Your life is not static, and neither are your insurance needs. Here are a few key reasons why you should review your insurance policies annually, or after a major life events:
- Home Improvements: Have you completed a kitchen remodel, built a new deck, or added a new shed? These updates increase your home's value and replacement cost, meaning your current coverage might no longer be sufficient.
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Life Events: A new baby, an empty nest, a new dog, or a home-based business can all impact your insurance. These changes can alter your liability risks and the value of your personal property.
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Changing Property Values: The value of your home and the cost of building materials can fluctuate. Your home’s market value may have increased, and you need to ensure your policy's dwelling coverage aligns with the current cost to rebuild. This is where replacement value insurance can help.
- Financial Changes: A change in income, debt, or savings can affect the amount of coverage you need for things like life insurance or liability. Your deductibles may also need to be re-evaluated to better fit your budget.
- Major Purchases: Have you recently bought valuable items like high-end electronics, jewelry, or fine art? Standard policies have limits on these items, and you may need to add a specific endorsement or "rider" to cover them.
- Evolving Risks: As weather patterns change, new risks may emerge. An annual review helps you assess whether your coverage is prepared for the most relevant threats to your home.
Annual Homeowners Insurance Review Checklist
- Check Your Dwelling Coverage: This is the most important part of your homeowners' policy. It should be based on the cost to rebuild your home, not its market value. Contact a local builder or your insurance agent for an up-to-date replacement cost estimate, especially after any renovations.
- Evaluate Your Personal Property Coverage: Take a quick inventory of your belongings. Have you acquired more furniture, clothing, or electronics? Remember to review coverage limits for expensive items like jewelry, art, or firearms.
- Assess Your Liability Coverage: Have you added features like a swimming pool, trampoline, or hot tub? Do you have a new dog? These items and pets increase your liability risk. Make sure your liability limits are high enough to protect your assets in the event of a lawsuit.
- Confirm Your Deductibles: Review your deductibles to ensure they are still manageable for your budget. A higher deductible can lower your premium, but you must be prepared to pay that amount out-of-pocket if you file a claim.
- Review Endorsements and Exclusions: Take a close look at what your policy covers and, more importantly, what home insurance doesn't cover. This is where you'll find gaps for things like water backup or valuable items. Consider adding endorsements for more comprehensive protection.
Additional Considerations For Virginia Homeowners
As a Virginia homeowner, it's essential to consider the unique risks of living in the commonwealth.
- Hurricanes and Severe Weather: Whether you're on the coast or inland, Virginia is susceptible to hurricanes, tropical storms, and tornadoes. While most homeowner's policies cover wind damage, some may have a separate, higher deductible for things like hurricanes. Check your policy to understand what your financial responsibility would be after a major storm.
- Flooding: Standard homeowners' insurance does not cover flood damage. Given Virginia's major rivers, watersheds, and coastal areas, flood risk is a real concern even in areas not designated as high-risk. Consider purchasing a separate flood insurance policy, often through the National Flood Insurance Program (NFIP), to protect your home from rising water.
- Earthquakes: While rare, minor earthquakes do occur in Virginia. Your standard homeowners policy will likely not cover earthquake damage, but you can purchase an endorsement for this specific risk. Check out Northern Neck Insurance's broadest home insurance coverage product for an incredible value that includes earthquake damage.
- Frozen Pipes and Winter Storms: Virginia winters can be mild, but short term cold weather blasts can occur. Your policy should protect against damage from freezing pipes and the weight of snow and ice on your roof.
Auto Insurance Review Checklist
- Review Coverage and Liability Limits: Virginia's minimum liability requirements have changed over time. Make sure you have at least the current minimum coverage ($50,000 for bodily injury per person, $100,000 for bodily injury per accident, and $25,000 for property damage). Remember that these offer basic coverage required by law and often additional coverage is recommended by experts.
- Account for New Drivers or Vehicles: Have you added a new driver to your household or purchased a new car? This is a prime reason to review your coverage.
- Check Your Uninsured/Underinsured Motorist Coverage: Virginia requires this coverage to protect you in case you are in an accident with a driver who has no insurance or insufficient insurance.
- Consider Local Driving Risks: Virginia has unique driving risks depending on where you live. Richmond and the I-95 corridor is well-traveled and congested and rural roads in the commonwealth have their own risks. Ask your local agent if comprehensive auto insurance or collision auto insurance is right for you.
Other Insurance Review Checklists
- Personal Umbrella: Review your assets and determine if your liability limits on your other policies are sufficient. An umbrella policy provides an extra layer of protection, which can be crucial in a major lawsuit. Umbrella insurance can be an important financial safety net.
- Renters Insurance: As a renter, your landlord's insurance does not cover your personal belongings, among other things. Take an inventory of your possessions and make sure your renter's insurance policy's coverage is sufficient to replace them in the event of theft, fire, or other damage. Also, ensure your liability coverage is adequate.
Keep Yourself Covered With Insurance Reviews
An annual policy review is a simple yet powerful tool to make sure all your insurance coverages are adequate. By making this a yearly habit, you can proactively manage your risks and avoid being underinsured.
Ready to get started on your insurance review? Contact NNINS today to talk to an agent and ensure your home is fully protected, no matter what the next year brings.