Home Insurance And Your Annual Review

When you buy home insurance you typically get coverages based on what it would cost to repair or rebuild your home, plus a percentage of that to cover your personal possessions. What many homeowners don't realize is that they may have made changes that could put them underinsured. That's what an annual review is for.

Your home owner policy also provides you liability protection in case of a lawsuit, but what can really change your coverage needs is if you purchase a lot of expensive items or do some remodeling. Some home insurance companies will automatically adjust your coverage on your dwelling to reflect increases in building costs, but that may not be enough -- especially if you've remodeled a kitchen or built a spa and gazebo in your backyard.

With an annual review, you go through your policy and look at the changes you've made to your home and make sure you still have the right coverage. You can do this by yourself or with your agent. In fact, your agent should periodically be contacting you to remind you of this.

Of course if you discover you need to raise your coverages, your premium may also go up. However, you may also have made some changes that could save you money with discounts. For example if you installed a burglar or fire alarm system or updated your electrical. Another way you can save is by raising your deductible; you may be in a better position financially to pay a higher deductible then you were when the policy was issued.

It's also a good idea to shop around -- especially if your premium does increase -- to make sure you're getting the best insurance value. An easy way to do this is to get online quotes. Try to get at least three quotes and provide the same information for each quote in order to get the most accurate comparison.