Home » 3 Reasons You Should Check Your Home Insurance Annually
June 4, 2021

3 Reasons You Should Check Your Home Insurance Annually

Many people purchase their homeowners insurance policy without considering what is included in the coverage. All too often, they learn they didn’t purchase enough coverage or changes to their policy impacted how their insurance companies valued their homes after a loss. When you proactively monitor your homeowners insurance policy every year, you eliminate surprises that could lead to you being underinsured. The following are three reasons you should check your home insurance each year.

Ensure You Have Enough Insurance 
Insurance companies typically offer two types of insurance policies for homeowners:

  • Actual Cash Value: the policy pays you based on the value of your items, minus depreciation. 

  • Replacement Cost: the policy pays you based on the items at today’s market values.


Since both policies calculate the monies you receive after a loss differently, determining which policy is most appropriate for you is based on your financial position and whether you want a lower insurance premium now or later. For instance, if you have an actual cash value home insurance policy, you may find that after owning the policy for years, you will not have enough money to cover the costs of rebuilding your home. Reviewing your policy annually will help you determine whether increasing your coverage or changing your policy is in your best interests.

Adjust the Policy Based on Insurer Changes 
Changes within the industry or newly proposed legislation often results in changes to insurance policies. Regardless of the nature of the change, you should determine how it will impact your home insurance. For instance, changes in the way an insurance company depreciates your home will affect whether you have enough insurance to replace your home after you have experienced a loss. By talking to your independent insurance agent, you will be able to determine how policy changes affect your coverage.

Determine Whether You Have Insurance Gaps
Understanding each type of insurance coverage included in your policy will help you make an informed decision about the amount of insurance you currently have for your home. With knowledge about what isn’t covered you can determine whether you need to purchase optional insurance.

Purchasing a homeowners insurance policy and forgetting about it may cost you money in the long run. Instead, you should review your policy on an annual basis, paying close attention to policy changes. Ignoring these changes may result in you not having enough insurance after incurring damage to your home after a major storm or after someone is injured at your home.

Ready to review your coverage? Contact Mikle’s Insurance Services for more information on Downey home insurance.

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