3 Tips To Audit Your Home Insurance Policy

13 July 2022
 Categories: Insurance, Blog

Stepping back and taking stock of your finances is a great way to save money and ensure that you're on a path to a healthy and bright financial future. There are plenty of ways to audit your household budget, but looking at your home insurance policy is one easy way to save money. Closely examining your current coverage can reveal gaps you need to address or areas where you may be overspending. 

Of course, home insurance can be a mysterious black box for many homeowners. You may not have closely examined your coverage in the past and may not even know critical information, such as policy limits or deductibles. If you don't consider yourself an insurance expert, these three tips will give you the info you need to audit your current policy and potentially save some cash.

1. Check Your Deductibles

If you've ever purchased insurance for a car before, you're probably familiar with deductibles. Auto insurance policies usually require deductibles on collision or comprehensive, and homeowner's insurance policies are similar. When you file a claim for damage to your home, you'll need to pay your deductible out-of-pocket before your insurance company pays for the rest of the repairs.

If you only expect to use your insurance for large claims, or if you keep a large emergency fund on hand, you may want to consider increasing your deductible. On the other hand, low deductibles are better if a higher one would put you into a potentially risky position. Whatever the case, it's worth asking your insurer how changing your deductible will affect your premium so you can make an informed choice.

2. Consider Your Contents Coverage

House contents (or belongings) insurance covers the stuff inside your home. This policy typically includes everything that isn't bolted down, from appliances to furniture to your kids' favorite toys. This policy may also include specialized coverage for certain items, such as jewelry or electronics. You should closely examine your policy to determine your limits and any extras included in your premium.

While it may seem daunting, it's a good idea to perform an inventory of your belongings. You don't need to arrive at a perfectly exact figure, but you should come up with a reasonable estimate for the overall value of items in your house. If this number is significantly lower than your coverage, reducing this amount may save you some cash on your premiums.

3. Ask for Discounts

Finally, it's worth calling your current insurance company and asking about discounts. Most insurers offer discounts for various situations, from recent renovations to your current work situation. You may be paying higher-than-necessary premiums if your insurance company is unaware of these factors, so it's a good idea to ask about any potential reductions at least once yearly.

While your homeowner's insurance may feel mysterious, it doesn't have to be. Carefully examining your policy, asking questions, and making necessary policy adjustments can help you understand your coverage and ensure that you aren't paying more than necessary.

Contact a local home insurance broker to learn more.