Why should I review my home insurance annually?

Most often, people purchase a homeowners insurance or renter’s insurance policy when they first move out and into their new home. And it ends there. Over time, as they make renovations, purchase new items or replace existing appliances, they don’t review their policies to ensure they are properly covered. This, unfortunately, can lead to a gap in their coverage.

What steps should I take to review my homeowners insurance?

The next time you need to renew your insurance policies, consider taking these steps to help you get the most out of them.

• Create a home inventory. A home inventory is a listing of the property in your home, the date you bought it, and what you purchased it for. This list can be used to discuss your needs with your agent as you choose the right coverage.
• Meet with your agent. Your insurance needs change over time. Conducting a home insurance review with your agent at least once each year can help you determine if your policies still make sense for your current situation. During this meeting:
  • Ask about discounts. During your annual home insurance review, ask about policy discounts. Before you renew your policy, speak with your agent about discounts that may be available. You may qualify for discounts for alarm systems, multiline, or higher deductibles.
  • Ask to review your auto policy. If you combine your home or renters insurance with auto insurance to get a discount, consider reviewing your auto coverage as well. And ask them about any safe driving or telematics discounts you might be eligible for.
  • Review home renovations. If you have added on to your home or updated any rooms in the house, be sure to talk about them with your agent to make sure your coverage reflects the changes.
  • Talk about any landscaping changes. Any new sprinkler systems, sheds, pool, or even a new riding mower may require changes in your policy.
  • Share any changes in the appliances. Like home renovations, updating you furnace or air conditioner can increase the value of your home.
  • Ask about insuring your home for the estimated cost to rebuild rather than the real estate value. State Farm® suggests you select a policy amount equal to at least 100% of the estimated replacement cost of your home, but the choice is yours. You also should make sure any replacement cost estimate reflects the actual characteristics of your home. Insuring your home for at least 100% of its estimated replacement cost — not the current market value — could give you the means to replace your home entirely in the event of a loss.

Carefully review the limitations on coverage and exclusions on all your policies and make your agent is aware of any significant changes in your life. Some items in your home might qualify for extra protection. For example, you may need more protection for jewelry and firearms. Business in the home coverage can protect furniture and equipment used for business purposes. Talk to your agent to make sure you're not overlooking important add-ons to your policy as well as sharing any significant changes in your life. Be prepared to ask your agent questions about your current coverages.