We hope that we can protect ourselves and our families from many of life’s uncertainties with quality insurance. But are we really getting the most out of our policies? The fact is, just because we have insurance doesn’t mean we’re fully covered. Are you prepared? Unless we take the time to review our policies periodically, we could end up with a big surprise when we need to file a claim.

Because the importance of reviewing insurance policies cannot be overstated, we are launching a series of blogs that give you an inside look at what to consider when reviewing your insurance coverage.

How to Review Your Insurance Policies

Step One – Partner with a Qualified Insurance Agent

Get the best coverage by partnering with a licensed insurance agent to help you with your insurance planning. Some may see insurance as a commodity, but advice is not. With insight and expertise, a qualified insurance agent has the product knowledge to build a custom plan that works best for your lifestyle.

Step Two - Review Coverage

Do you understand the coverages on your policy? Are there any gaps in these coverages? Are you getting all applicable discounts?

Step Three – Consider Your Circumstances

Has your life changed recently? Have you made some big purchases, switched jobs or added/changed family members? Help your insurance agent get you the right level of coverage by keeping them informed.

When Did You Last Review Your Home Owner Insurance Coverage?

Have you reviewed your home owner’s insurance policy lately? If not, you’ll want to do so the next chance you get. Otherwise, you may find yourself in an unfortunate situation if you fall victim to a house fire, burglary or flood. The best thing we all can do is make sure we have the coverage that’s right for us before we have a loss. The high number of claims has made home owners insurance coverage more expensive than ever – but there are ways to ensure you receive value from your policy. Make an appointment with your insurance agent to review your policy when it renews and re-assess your home insurance coverage whenever there is a big change in your circumstances (the purchase of an expensive item, a major remodel/reconstruction, etc.)

Your Home Insurance Coverage Review Check List

Here are the important coverage areas to consider when it comes to house insurance coverage.

Dwelling Coverage

Did you know that an underinsured dwelling can incur penalties? So, what’s the adequate amount of dwelling coverage? It should be enough to cover the cost of rebuilding a home should there be a complete loss – but remember, it’s not based on market value, but rather on the replacement cost of dwelling not including land. This is why it’s so important to re-assess your policy especially if you’ve remodeled or renovated.

Replacement Cost or Actual Cash Value

What if your dwelling and its contents get damaged or destroyed? Replacement cost coverage and actual cash value insurance will be there to protect you. This refers to the amount your provider will pay – Replacement cost coverage doesn’t deduct for depreciation while actual cash value insurance does.

Liability Coverage

Liability Insurance helps protect you against the financial uncertainty arising from injury (or property damage) that you or your family may cause to other people. It typically covers injuries whether they happen on or away from your property. If you don’t have enough liability insurance, then your assets could be at stake. The liability coverage on your homeowner’s policy helps you to protect your retirement accounts, investment in stocks and bonds, checking/saving accounts, home and other real estate equity. It is very important to discuss the assets you need to protect with your agent to determine the level of liability coverage that is right for you.

Do You Have an All-Risk or a Named Peril Policy?

When choosing home owners insurance, you have these two choices. The primary difference between them is that a named peril policy covers what is "named" (included) in the policy while an all risk covers everything except what is excluded. Typically, an all-risk policy offers much more comprehensive coverage.

Contents Coverage & Personal Items

Don’t you just love your flat screen television, that mahogany dining room set, those designer brand clothes? What about your beautiful jewelry, piano or other personal items? The value of your belongings adds up quickly, so you should understand how much coverage you need and when or if an appraisal is required to adequately cover your personal property.

Other Structures on Property

While you’re right if you assume most policies automatically provide this coverage, you should be sure you’re adequately covered if you have a cottage, swimming pool or shed on your property.

Property Inflation Adjustment

Your insurance provider should automatically adjust your policy with building cost inflation, but do yourself a favor and double-check this. You may see a minimal annual increase to adjust for the rising replacement cost coverage.

Building Ordinance & Water Sewer Backup

If your home is older than 25 years, building ordinance coverage could be very important. If a local building ordinance calls for the destruction of the dwelling, your insurance company may deny paying for increased costs or demolition expenses incurred. You may also want to consider water and sewer backup coverage.

Policy or Coverage Changes

Has your insurance company changed your policy or coverage? They are required to contact you when this occurs, but in the event you missed their notification, you should check on this from time to time.

New Discounts

Always review all eligible discounts because this is an easy way to cut down on the expense of your home insurance coverage. Also, consider adding a protective device like an alarm system or adjusting your deductible for increased savings.

Your insurance agent will always be there to help you with your home insurance. Staying educated about your house insurance coverage is the best way to get the most out of your policy, so don’t hesitate to go to your agent with questions. The worst thing to do is to just "set it and forget it." And remember to never assume you’re fully covered just because you have home insurance coverage.