This article has been updated from a previous version.
There’s no financial investment quite like a home, so having up-to-date home insurance and not ignoring policy renewal notices probably seems like a no-brainer – especially since renewal is automatic. But because it does renew automatically, it’s easy to lose sight of your coverage details and the value of your premium.
If you're renovating or have built an addition on your home, added appliances, or made kitchen and bathroom upgrades, you're going to want those improvements reflected in your policy so that you're insuring the current replacement value of your home.
If you neglect to do this and later experience damages to any of these upgrades, you won't be able to make a claim.
If you have new occupants in your home, like a partner, parents, or kids, you'll also want to notify your insurance provider, as well as if you're now working from home and have bought new office equipment.
So, when it comes time to renew, you’ll want to be sure that you’re getting the coverage you need at the best price.
Don’t wait for renewal to update your home insurance provider
Some other home-related changes that you’ll want your insurance policy to reflect include:
- Home repairs
- Major purchases, including art, antiques, and jewelry
- New pets
- A new heating system
- An alarm system that’s been either installed or deactivated
- A pool or sauna installation
- If you are intending to rent part of or your entire home to tenants on a short-term or long-term basis
Don't wait for renewal time to make sure your policy reflects these changes. Inform your insurance provider as soon as possible so you're covered straight away. You'll also want to consider the limits of your coverage, and if you're still comfortable with your deductible.
When it comes to renewal, the little details matter, too. Take the opportunity to verify the names of all those living in your home, your address, and make sure your payment method is up to date.
Letting your home insurance auto-renew could mean leaving money on the table
One of the most important reasons you shouldn’t ignore your home insurance renewal notices is that it could cost you money.
It's in your best interest to check if and how your insurance rates have changed at renewal. If you're not sure why they might have gone up, ask your insurance provider. Here are some reasons your premium might have increased:
- Your coverage has increased
- You made a claim within the last year, or have a long history of claims
- Your home has gotten older, needs upgrades, or has been exposed to more risks
- Your credit score has taken a dip, and you've become higher risk in the eyes of your insurance company
- Overall claims costs have increased throughout the year due to things like climate change, leading to a rise in premiums
Whatever the case, take it up with your insurance agent or broker, and ask questions so you're aware of all changes. See if there might be any discounts available to you (for example, in the case of installing smoke detectors), or remove coverage you don't need.
Renewal is also a great time to reconsider your deductible. Maybe you’ve gotten a raise at work or saved up a beefy emergency fund and are now confident you could pay a higher deductible when the need arises. This will help lower your premium.
If you find another insurance company offering lower premiums, you might want to cancel your current policy (which you can do at any time, not just at your renewal). Keep in mind, however, that if you cancel before your term is up, you may be charged a penalty depending on when you make this change. This is why when you receive your renewal notice at the end of a policy period is the ideal time to make a change.
In general, most homeowners will receive a renewal notice 30 days before their policy's expiry date, so keep track of that period if you want to reassess and take stock of any changes.
And don't be afraid to shop around for a better deal on your home insurance in the meantime. You want to ensure that your home insurance policy is meeting your needs today, not yesterday.
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