Life changes quickly, and your home insurance coverage should keep up. To avoid unexpected insurance gaps, it’s a good idea to review your home insurance policy at least once a year. Over the course of twelve months, many seemingly small changes can affect your insurance coverage. If these updates aren’t reflected in your policy, you could face coverage gaps or reduced compensation when filing a claim.
Completing an annual home insurance review helps ensure your policy accurately reflects your home, belongings and lifestyle—reducing the risk of surprises when you need your insurance most. For example, did you recently purchase the big-screen TV you’ve been eyeing for months? Maybe you renovated your kitchen or installed a swimming pool in the backyard. These are common upgrades for homeowners across Ontario, but many people forget that these changes can affect their insurance coverage. Without updating your policy, you may be underinsured, which could lead to unexpected out-of-pocket costs during a claim.
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What does a home insurance review include?
What are the benefits of reviewing your home insurance policy annually?
Reviewing your home insurance policy each year provides peace of mind that your property and belongings are properly protected if something unexpected happens. This protection will be useful in case something unexpected happens, such as a fire, theft, or a weather event. A review can also result in a potential reduction in your insurance costs. For example, your broker may discover that you’re eligible for discounts or require less coverage than you did previously.
During an insurance review, you should evaluate your home insurance (or renters insurance), car insurance and any other policies you have in your name. In just a year, many things can happen. Changes in residence, occupation and schools can force you to pivot and adapt to new circumstances. These life-changing events can happen outside the typical annual policy timeframe. This is why it’s a good idea to take stock of everything that happens during your insurance review.
Common situations where coverage may be needed include:
A policy review can also help reduce insurance costs. Your broker may identify discounts you now qualify for or recommend adjustments to your coverage in response to changes in your lifestyle. It’s also a good idea to review all of your insurance policies together, including:
Home insurance or renters insurance
Auto insurance
Seasonal property insurance
- Umbrella liability coverage
Life events such as moving, renovations, career changes or children leaving for school can all impact your insurance needs.
5 key areas to review in your home insurance policy
1. Your home inventory
Think about the number of expensive items we rely on every day—televisions, smartphones, laptops, gaming systems and appliances. A home inventory list helps ensure your insurance coverage reflects the value of your belongings.
When updating your inventory:
Keep receipts and purchase records
Take photos or videos of major items
Record model and serial numbers
Store documentation in a safe digital location
Special occasions such as birthdays, holidays or major sales events often lead to new purchases that increase the value of your belongings. Maintaining an updated home inventory can also make the claims process faster and easier if you ever need to prove ownership of your possessions.
2. Scheduled or high-value items
Many homeowners are surprised to learn that certain valuables have special coverage limits under a standard home insurance policy. Items such as jewelry, bicycles, or collectibles may be covered only up to a specific dollar amount unless they are scheduled separately through an endorsement or an insurance floater.
Common items with coverage limits include:
Jewelry and watches
Bicycles and sporting equipment
Watercraft
Musical instruments
Artwork and collectibles
Medical devices such as hearing aids
If you own high-value items—such as engagement rings, luxury watches or collectibles—you may want to consider additional insurance coverage to ensure they are protected for their full value.
3. Renovations and home upgrades
Home renovations are one of the most common reasons homeowners should update their insurance policy. Popular upgrades such as kitchen renovations, finished basements, or outdoor living spaces can significantly increase your home’s value.
Examples of renovations that can affect insurance include:
Kitchen or bathroom renovations
Basement finishing projects
Home additions
Decks or outdoor entertainment areas
Swimming pools or hot tubs
These upgrades can increase your home’s replacement cost, which may require you to update your coverage limits.
It’s also important that renovations are completed with proper permits and inspections. If renovations are not disclosed to your insurer and damage occurs later, your claim could potentially be denied due to material misrepresentation.
Learn more about how home renovations can affect your insurance here.
4. Your home’s replacement value
Many homeowners ask, “How much is my home worth?” However, home value can be measured in several different ways.
These include:
Market value (what your home could sell for)
Assessed value (used for property taxes)
Replacement cost (cost to rebuild the home)
Actual cash value (replacement cost minus depreciation)
For insurance purposes, replacement cost is usually the most important value because it reflects the cost to rebuild your home after a major loss. Construction costs have increased significantly in recent years, making it even more important to review replacement costs regularly.
5. Personal liability coverage
Personal liability coverage protects you if someone is injured on your property or if you accidentally cause damage to someone else’s property. This becomes especially important if your property includes features such as:
Swimming pools
Hot tubs
Trampolines
Treehouses or playground equipment
Large decks or entertainment areas
Many homeowners carry $100,000 in liability coverage, but insurance experts often recommend at least $300,000 or more, depending on your assets and lifestyle. If you have significant assets to protect, an umbrella liability policy may provide additional protection beyond your standard home insurance.
Did you know that you might need extra home insurance coverage if you have a pool or hot tub? Pools and hot tubs may increase the risk of flooding in your home, so additional coverage is typically necessary.
FAQ: Frequently Asked Questions
When should you update your home insurance policy?
While an annual review is recommended, certain life events should trigger an immediate update to your home insurance policy.
You should contact your insurer or broker if you:
Complete major renovations
Install a pool or hot tub
Purchase expensive items or collectibles
Start working from home
Buy a rental or secondary property
Install security systems or smart-home technology
Updating your policy when these changes occur can help prevent insurance gaps and ensure your coverage remains accurate.
Does home insurance cover expensive jewelry and electronics?
How often should I review my home insurance policy?
Can I be underinsured after renovations?
Protect your home by closing insurance gaps
Reviewing your home insurance coverage regularly is one of the best ways to ensure you and your family are properly protected. By updating your policy each year and notifying your insurer about important changes, you can avoid coverage gaps and ensure your home and belongings remain adequately insured. If you’re ready to review your home insurance coverage or want help identifying potential gaps, contact isure today to speak with one of our advisors.
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