3 Reasons Why Your Home Insurance Can Increase

Are you happy with how much you are paying for home insurance? If so, be aware that there are things that can cause your insurance to go up.

Performing a Major Renovation

Your home insurance premium was based on the status of your home when you first got the policy. If you were to make modifications to your home since then, and your insurance company became aware, then your premium can increase as a result. For example, you may have recently decided to finish your basement into an additional living space, remodel your entire kitchen, or add an addition to your home for an extra bedroom.

While you may think that the solution is to not let your insurance company know, that mistake may cost you more than your insurance premium increase. Your policy is designed to cover your home in a total loss scenario, which is based on the construction costs to do so. This dollar amount was based on the state of your home before the renovation, not after. While you may think you are saving money on your home insurance, know that not telling your insurance provide could leave you short the necessary cash to repair your home in a total loss situation.

Getting Rid of Your Alarm System

Many safety factors go into how much you pay for homeowners insurance. This includes if you have deadbolts, how far away you live from a fire station, and if you have an alarm system. If you told your insurance provider that you have a security system at the time you received the policy, you may have received a slight discount as a result.

Unfortunately, getting rid of your security system means that the discount will go away as well. Also, if you ever have a break-in and your insurance provider discovers that your alarm system has been removed, it could be used as a justification to not pay out for the loss.

Starting a Home Business

One major change that can increase your premiums is starting a home business. A business brings more liability to your home, because you could have additional inventory, equipment, and a even more people visiting your home on a regular basis.

Your insurance provider may require a rider to cover all items related to a home business, so do not expect it to be covered by default. Not notifying your insurance provider about your new business could cause a huge financial loss if something were to happen to your home.

For more information, contact a company such as Wolf Insurance Agency.