8 Reasons to Scrutinize Your Homeowners Insurance Policy

By Allison Bisbey Colter
Special to VanLines.com

Your needs for homeowners insurance will change occasionally -- maybe you've added a new addition, or updated the safety features on your home. Either change can change your insurance needs.

Here are some of the more common reasons to update your policy.

1. A remodel. "Something as simple as a bathroom remodel can impact your home value and should be discussed with your agent," says Madelyn H. Flannagan, vice president for education and research at the Independent Insurance Agents and Brokers of America, Inc., a trade association.

2. You have more stuff. Americans are great acquirers, so you need to be sure your insurance keeps up with all the stuff you're accumulating. Check with your agent for specific coverage levels; a home inventory is a good way to check this.

3. Rebuilding costs are going up. Know the difference between the market value of your home, which includes the land, and the home's replacement value. They aren't the same. You're not replacing the real estate; you're replacing the home. However, the cost of rebuilding is likely to rise, so it's a good idea to review your coverage every few years.

4. You've installed safety features. Many insurance companies offer credits for alarms, sprinklers and other safety devices, be sure to ask.

5. You now work from home. If you're running a business from home, you may have limited or no coverage under your homeowner's policy. It pays to check this out.

6. You've got expensive items. If you have an extensive collection of jewelry or art, you may need additional coverage.

7. You want to protect your liability. Homeowners does not just protect the structure and contents of your home -- it also covers you against lawsuits for bodily injury or property damage that you or your family members cause to other people. As you acquire more assets, you're more at risk.

8. Your home is gettin' old. Granted, this isn't a change, but if your home was older to begin with when you purchased it, you might want to ask your agent about things that could expose you to greater risks as your home ages even further. For example, most homeowners polices don't protect you from damage that's caused by sewer or drain back-ups.

Allison Bisbey Colter is a freelance writer in New Jersey whose work has appeared in The Wall Street Journal and American Banker. She is a former editor at TheStreet.com and a former reporter for Dow Jones Newswires.