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It may be time to change the cover.
Key points
- Home insurance can protect you financially in the event of damage to your home.
- You may need to change insurance policies or providers if costs continue to rise or your provider is too hard to reach.
If you own a home, home insurance isn’t just a luxury. Rather, it is a necessity.
Without insurance, you risk having to foot the bill for expensive repairs if your home is damaged in a weather event or fire. Also, you need home insurance in case someone gets hurt on your property. Otherwise, you might end up having to shell out money to cover a visitor’s medical bills.
But as important as home insurance is, having the right policy is just as important. This means, among other things, having adequate coverage so that if your house were to be destroyed, you can rebuild it. But if these signs apply to you, it might be time to consider changing insurance policies or moving to another home insurance company.
1. Your deductible is so high that it rarely pays to file a claim
When your home suffers damage, the cost can range from aggravating to catastrophic. Most of the time, your home insurance deductible (the amount you have to pay out of pocket per claim) will be much lower than the cost of a major repair. But it’s these less extreme repairs where things get tricky.
The higher your home insurance deductible, the lower your premiums are likely to be – and vice versa. But what you don’t want is a deductible so high that it puts you in a situation where it rarely makes sense to file a claim for damages.
So, let’s say your home insurance policy comes with a $2,000 deductible. This could mean a lower premium rate. But if you tend to find that most covered issues with your home amount to $1,500 to $2,000 of damage, then you might want to consider switching to a policy with a lower deductible – say, a policy in the range of $500 to $1,000. It could mean spending less out of pocket.
When you need to file a home insurance claim or get information about your coverage, the last thing you want is to be kept waiting. If you’ve found that your home insurance company is difficult to contact and slow to respond, that’s a sign that you might be better off taking your business elsewhere.
3. Your premiums keep going up when you haven’t made a claim
The more claims you file against your home insurance policy, the more your premiums are likely to increase. But if your premiums increase significantly from year to year while you do not have filed claims, it may be time to start looking for another insurer.
Admittedly, what will often happen is that insurers will increase premium rates as claims increase in a given coverage area, so even if you are not the one filing these claims, the cost could be passed on to you. But in this case, you should really only consider small incremental increases. And if that’s not what happened, then a new policy might be in order.
Your home insurance should serve you well and give you peace of mind. If these factors apply to you, it might be worth spending some time researching different options and changing your coverage in the future.
