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September 17, 2021 Adrian Zee

When should you review your insurance premium?

If you own a home or rent a place, you likely have insurance to protect yourself from unfortunate scenarios. This protection is critical if a flood destroys your home, or you become liable for starting a fire in your apartment building. But to ensure that your protection remains intact, you should regularly review your policy. 

This article reflects on four situations where you should review your insurance premium. While our advice focuses on homeowners and renters, it’s also applicable to everything from business to life insurance. 

Annual reviews with your broker

It never hurts to check annually with your insurance broker whether your current plan is up-to-date. We have changing life circumstances that can affect our insurability without us knowing. Your broker can tell you whether you’re under or over-insured or whether you’re now eligible for a cheaper plan. 

The worst-case scenario is that there aren’t any changes! If anything, meeting with your broker provides peace of mind that your family and belongings are adequately protected. 

Major purchases or renovations

If you purchase an expensive piece of art or just installed a new pool, it’s a crucial time to review your home or renter’s insurance. 

Both home and renter’s insurance covers the contents of your home. But policies commonly require you to inform your insurer if you’ve made major purchases. This way, your insurer can readjust your policy to account for your new purchase. 

Suppose you recently purchased a $5,000 piece of artwork. If you don’t inform your insurer and your home is burglarized or destroyed and your artwork is now gone, your insurer likely can’t replace it.

The same logic applies to renovations. Renovations usually increase the value of your property, but without informing your insurer of a renovation, your policy may not cover the new pool or renovated basement. So, if a flood occurs in your newly renovated basement, your policy may not cover all the damages. 

Additionally, some renovations may create additional risks that could void your current insurance policy. It’s essential to speak to your broker to understand whether you need to adjust your plan. 

Change in family or career circumstances 

Many family and career circumstances can affect your insurance rate. On the family side, divorce isn’t the only reason to contact your insurer. Changes such as a new child, marriage, death, or a child going off to college can affect your rate. These scenarios may be hard to spot, which is why annual reviews with your broker are valuable. 

A lot of roles now allow employees to work remotely 100% of the time. This may be a reason to review your home or renter’s insurance policies. It’s especially important if you’ve switched to managing your own business or consultancy practice because your home insurance may not cover commercial liabilities and expenses.

Additionally, if you recently started a side business, it may also affect your insurance. For example, a side hustle baking cakes may mean you need a rider policy to cover fires that result from your new venture. Turning your basement into a long- or short-term rental could also have substantial impacts on your insurance plan. 

Additional security features

Insurance is all about risks. If you improve your home with new security features to prevent robberies, it ultimately reduces the chance you’ll need to claim your insurance. Your insurer understands this and may reward you with a discount on your premiums. 

Other upgrades like improvements to your electrical system or flood-proofing your basement can provide similar discounts because you ultimately mitigate the risks your insurance is designed to protect against. 

Many events that you may not even consider could affect your insurance premium. Check with your broker today to see if you may need additional coverage for your current life circumstance or if you may qualify for a discount on your premiums. 

Adrian Zee

Adrian Zee is a freelance writer and a student at Osgoode Hall Law School. Previously, he studied management and writing at Western University and worked in the data & analytics industry. Adrian is also a part-time food writer and photographer at DailyHive/DishedTO.