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How Often Should You Review Your Homeowners Insurance?

Updated Jan 6, 2023

Updated Jan 6, 2023

Home > Home Insurance > How Often Should You Review Your Homeowners Insurance?

You should review your home insurance coverage at a minimum once a year to ensure that your policy protects you, your family, your personal property, and your home appropriately. 

You never want to be underinsured or overinsured because both increase your financial risk. If you’re underinsured, you risk a peril happening, like a theft or natural disaster, and your home and belongings not being covered enough. On the other hand, if you’re overinsured, you’re overpaying each month and wasting money that you could use for something else. 

Keep reading to learn more about why you should review your home insurance coverage and when you should review it. 

When Should I Review My Home Insurance Coverage?

As a general rule, these are instances when you should automatically check and review your home insurance coverage: 

  • When your homeowners insurance policy comes up for renewal. Never blindly send a check to your insurance provider for a renewal without reviewing your policy. Take time to speak with your agent and address any concerns or questions you have. During this time, consider raising your deductible to save money, asking about newly available discounts, or gathering home insurance quotes and shopping around for a new policy to save money. 
  • Review it annually. Many home insurance policies renew every couple of years. However, you should still check and review your policy each year to ensure it’s up-to-date. 
  • Whenever a qualifying incident in your life happens. Qualifying incidents, like home renovations or changes to your family circumstances, affect how much coverage you need to be adequately covered. 
  • During negotiations with your mortgage lender and real estate agent. Suppose you are in the process of buying a home. In that case, your mortgage lender, financial institution, or real estate agent will likely require you to have homeowners insurance to protect their investment. Double-check your contracts with these entities to ensure your policy meets their requirements and make any adjustments from there. 
  • If your home increases or decreases in value. Suppose you purchased your home six years ago and insured it for $300,000. If your home has changed in value, such as increasing to a value of $325,000, you’ll want to enhance your coverage. Most increases in home insurance coverage cost less than you think, so this is a practical way to protect your financial investment. 

What Is an Insurance Review?

An annual insurance review covers how much it would cost to rebuild or replace your home and personal belongings. As a result, depending on Zillow or online market value, estimates of your home won’t be sufficient. 

An insurance review needs to be comprehensive and include new renovations you’ve made to your home, your personal belongings’ cash value, and more. You’ll also want to consider how much other structures on your property, such as fences, detached garages, swimming pools, and sheds, are worth and value them to see how much coverage you need. 

What’s an Insurance Qualifying Event?

Insurance qualifying events are life events where significant changes have occurred. These events can happen anytime, so you need to contact an insurance agent whenever one happens, even if it’s outside your typical home insurance policy renewal time. 

For insurance purposes, these are qualifying life-changing events: 

  • Professional changes: If you own a business, significant changes to your company can warrant an insurance review. Examples of professional changes include going public with your business or changing office locations. 
  • A change in family status or size: Getting married, having a child, adopting a pet or child, losing a family member, or getting divorced are all examples of changes to your family status and size that may affect your homeowners insurance premium. 
  • Changes to your living situation: Changes to where you live or your home may warrant an insurance review. Examples include home remodeling, selling a property, moving out, or renting your home as a short-term rental property. For example, if you install a swimming pool, you should immediately check with your insurance providers that your insurance covers your new pool. 
  • Retirement: If you retire, this may merit an insurance review and adjustment. This category would also extend to downsizing to a new home or renting a house instead. 
  • Childhood milestones: If you have children and they move out for college or begin driving, it’s a wise time to check in with your insurance agent to have your coverage reviewed.

Additional Times You May Want an Insurance Review

You may want an insurance review any time you need to adjust your coverage. For example, if you inherit a large sum of money, are increasing home security measures (like adding a security system), upgrading your home’s electrical system, or purchasing new, high-value possessions. These are all times when you may want to up your insurance coverage to protect the value of your home and personal belongings. 

Providing your home insurance carrier with an updated home inventory reflecting new jewelry, electronics, or other pricey items will help your insurance company determine how much additional coverage you may need. 

Another critical time to reevaluate your coverage is when a natural disaster has occurred in your area or the frequency of these disasters changes. If this is the case, consider increasing the types of coverage you have on your home for extra protection. If you live in an area with floods or earthquakes, look into additional dwelling coverage or flood insurance for these perils because most homeowners insurance policies mark these as exclusions

What Should I Do After an Insurance Review?

After an insurance review, review your policy with your insurance company directly. Don’t rely on whatever your insurance company calls “full coverage” because there are always exclusions. You want to have a list of each of these exclusions on hand and add more coverage for any areas that are lacking, have low coverage limits, or are entirely excluded from your coverage. 

In addition, check that your deductible is actually affordable. Choosing a pricey deductible worth 20% of your home’s value will put unnecessary stress on your financial situation during an already devastating loss. 

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