Your Home is Your Castle: How to Protect it Through the Years

For many people, owning a home is the American dream, and the single biggest financial investment they will ever make. With the stakes so high, in addition to picking out the perfect property, it’s critical to have the right insurance.

While homeowners may start out with the right amount when they first purchase their home, over time, their policy can become outdated. Why? One big reason is inflation.

“Labor and building material costs go up over time, which means that if your home were destroyed by a fire or natural disaster, for example, and you had to rebuild it in today’s dollars, it would very likely cost much more,” said Bob Buckel, vice president and product manager, Erie Insurance. “That’s why we recommend that all homeowners get ‘guaranteed replacement cost’ coverage.”

In addition to making sure your insurance keeps up with inflation, experts also recommend homeowners reach out to their insurance agent when:

• You remodel: 2019 is expected to be a popular year for remodeling, according to the Leading Indicator of Remodeling Activity. Whether it’s putting on an addition or finishing the basement, be sure the extra square footage and finishes are listed on your policy. Why? If something were to happen (think: fire, water damage, etc.), you’ll want your insurance policy to provide enough funds for everything to be repaired or replaced.

• You make changes to outdoor space: The same is true with any remodeling to your outdoor space. The addition of an in-ground pool or fence can add value to your home. There are also liability concerns associated with certain equipment, such as a swimming pool or trampoline. Unfortunately, at least 148 children drowned in swimming pools last summer and many more were injured, according to the Consumer Product Safety Commission. You’ll want to make sure you’re properly covered in the event of an accident.

• You install a security system: You may qualify for a discount on your insurance if you’ve recently installed a security system. One study by the Electronic Security Association (ESA) looked at the 10 largest insurance companies and found many offer worthwhile premium discounts.

• You start a home-based business: Whether you have a side hustle or draw a full-time income from a home-based business, you may not have the right coverage in place. For example, if you’re selling LuLaRoe clothing and there’s a fire, your merchandise might not be covered since typical policies don’t always cover home-based businesses. You’ll most likely need an incidental business endorsement. Coverage from Erie Insurance could cost about $30 to $70 per year.

• You acquire valuables: Homeowners insurance covers your belongings, but generally only up to a certain dollar amount per item. So, if you acquire an expensive item, such as an engagement ring, a fur or a valuable artwork, you should talk to your insurance agent about adding special coverage. You may also need to provide a receipt or appraisal.

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