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Insuring Your Home Sweet Home

New insurance options and discounts may exist for your entertainment and security add-ons.

A simple, two-story home with a small yard and a white picket fence used to be the quintessential American home. But today, homeowners customize their property with everything from online security devices to pools, trampolines, elaborate backyard designs and even personal drones.

These trends have led insurers to continuously reshape and refine their coverage offerings to reflect emerging needs. If you’ve made any significant purchases or home improvements recently, you may want to explore add-on insurance options to make sure all of your assets are fully covered. You may also be eligible for discounts, if your improvements increase your home’s security.

Homeowners' Insurance CoverageAnalyzing Your Home Risk

Carriers use predictive analytics to continuously assess the risks of homeowners and adjust rates or coverage options accordingly. For instance, after analyzing data on the large number of dog bite claims, insurers now ask if you own a dog and, if so, which breed. If you have an aggressive breed, don’t be surprised if your insurance policy denies coverage for dog bite claims.

It’s the same with items such as trampolines, unfenced swimming pools, all-terrain vehicles and diving boards. These all add to a homeowner’s risk – and many times insurers will not underwrite them in a standard policy.

Still, as technologies and gadgets continue to change, insurers are trying to fill coverage gaps by adding endorsements, integrating new lines of coverage, expanding discount packages and customizing policies to meet consumers’ interests. Soon, homeowners will be able to buy policies with options to add cyber liability, identity theft protection, flood coverage, mortgage life, special limits for toys and equipment breakdown.

A few examples of add-on insurance that have gained traction recently include water and surge back-up, which minimize damage due to a water line malfunction, as well as mechanical breakdowns. Many homeowners are particularly drawn to mechanical breakdown coverage, which is also known as home warranty coverage. This covers repair costs and partial replacement costs for appliances such as HVAC systems, refrigerators, washers and dryers.

Look for Discounts Related to Your New Purchase

As more people start to employ smart home technologies to keep their homes safer, such as connected water sensors, smoke detectors and door bells, insurers will be measuring how these items will have an impact on your homeowner’s policies. Some items, such as water shut off systems, which have the potential to reduce water loss claims, may earn you a discount if you have that device installed. Others, such as sensors which indicate alarm system activation, may result in removal of your home security system discount if you regularly forget to arm the system.

Consider the Cost of Damage

Personal drones have also recently come to the attention of insurers. The question over these gadgets centers on whether any bodily injury or property damage caused by these toys is covered under a normal homeowner’s policy. The current answer seems to be yes, but that may change if there’s a rise in use and accidents.

Vacation rental by owner (VRBO) properties add another layer of complexity to homeowner’s insurance. Considered a commercial enterprise, any damage caused by a renter would fall under VRBO coverage and not regular homeowner’s insurance. But home-sharing services such as Airbnb, where you may rent out a room in your home for a few days, do not pose quite the same risk as a VRBO, and insurers are currently determining the best way to underwrite this activity.

With so much change in the marketplace, it’s a good idea to review your policy regularly to make sure you are getting all the coverage you need – or all the discounts that you deserve. Contact your HUB personal insurance broker for more information.