Owning a home is one of the most significant investments you’ll ever make. To safeguard your future, it’s crucial to protect it with a robust home insurance policy. However, simply purchasing a policy and forgetting about it isn’t enough. Regular reviews of your home insurance are crucial to getting the right coverage at the right price. Here are seven reasons why you should conduct regular home insurance policy reviews.

1. Changes in Home Value

Your home’s value can change significantly over time due to factors such as market conditions, renovations, and improvements. According to the Federal Reserve, home prices in the U.S. have increased by an average of $90K over the past five years alone.¹ A home insurance policy that was adequate when you first bought your house may no longer provide sufficient coverage.

For example, if you’ve added a new room, upgraded your kitchen, or installed a swimming pool, these enhancements can increase your home’s value. Regular reviews help ensure your coverage matches the current value of your home, protecting you from being underinsured.

2. Adjustments in Personal Belongings

Over the years, you accumulate more personal belongings, and the value of these items can increase. The Insurance Information Institute reports that the average homeowners claim in 2022 was around $18,000 with over 5% of homeowners making such a claim.² Electronics, furniture, jewelry, and other valuables can add up, and their coverage limits may need to be adjusted accordingly.

Regular policy reviews allow you to take stock of your possessions and update your insurance to reflect any significant additions or upgrades. This ensures that in the event of theft, fire, or other disasters, you’ll be adequately compensated for your losses.

3. Updates to Coverage Options

The insurance industry is constantly evolving, with new coverage options and endorsements becoming available. For instance, climate change has led to an increase in the frequency and severity of natural disasters. The National Oceanic and Atmospheric Administration reported that the U.S. experienced 28 weather and climate disaster events in 2023, each causing over $1 billion in damages.³

Reviewing your policy helps you take advantage of new options that keep your home more secure. You might want to add coverage for natural disasters like floods or earthquakes, which are typically not included in standard policies. Staying informed about new coverage options can provide better protection and peace of mind.

4. Adjustments to Deductibles

Your financial situation can change over time, and so can your tolerance for risk. According to Bankrate, 44% of Americans have less than three months’ worth of expenses saved, indicating a limited financial cushion for unexpected costs.⁴

Regularly reviewing your home insurance policy allows you to reassess your deductibles. A higher deductible can lower your premium, which might be a wise choice if you have the financial resources to cover out-of-pocket costs in the event of a claim.

5. Discounts and Savings Opportunities

Insurance companies often offer discounts and savings opportunities that policyholders may not be aware of. Policyholders who bundle their home and auto insurance can save 20% on premiums.⁵ By reviewing your policy regularly, you can ensure you’re taking advantage of all available discounts.

For example, installing a security system, smoke detectors, or even living in a gated community can qualify you for discounts. Additionally, maintaining a good credit score or remaining claim-free can also result in premium reductions. Regular reviews help you identify and capitalize on these savings opportunities.

6. Changes in Risk Factors

The risk factors associated with your home can change over time. For instance, if there’s been an increase in crime in your area, you might need additional coverage for theft and vandalism. Alternatively, if local building codes have changed, you might need coverage for code upgrades in case of a rebuild. Regularly reviewing your policy helps you stay informed about any changes in risk factors and ensures your coverage remains adequate.

7. Compliance with Mortgage Requirements

If you have a mortgage, your lender will have specific insurance requirements that you must meet (for instance, flood insurance if you’re in a high-risk area). These requirements can change over time, and failure to comply can result in penalties or even foreclosure. Regularly reviewing your home insurance policy ensures you remain in compliance with your lender’s requirements. Additionally, it provides an opportunity to shop around for better rates or coverage options, potentially saving you money on your mortgage insurance.

Who is Answer Financial?

Regular reviews of your home insurance is obviously a good practice, but how much time do you want to spend doing it? Luckily, the experts at Answer Financial are ready to do the work for you! As one of the nation’s largest and most reputable auto & home insurance agencies, Answer Financial has insured nearly 5 million homes and vehicles. We work with 40+ top-rated carriers to save our customers an average of $565 a year on insurance.* Using our mobile-friendly website, Answer Financial can help you compare, buy and often save the smart way on insurance. So before you shop, remember to rely on your insurance experts to find you the right home insurance plan for your needs and budget.