Costs for building and replacing possessions change often; so do insurance rates. Make sure you’ve got the coverage you need and aren’t paying too much.

When’s the last time you took a look at your homeowners insurance policy?

Many of us renew our policies without giving them a second thought, and this could be a big mistake. Here are five reasons you should review your coverage

• Building costs
  If it’s been several years since you’ve reviewed your policy, your coverage may not be enough to cover rebuilding because of rising building costs. Also, in the event of a widespread disaster like a tornado, low supply and high demand could drive costs up even more.

Make sure your homeowners insurance covers the cost to rebuild today. Evaluate your coverage once a year.

• Deductibles
  Yours could be too high or too low. A lower deductible means higher premiums; a high deductible could blow your budget if you don’t have enough cash on hand.

Choose a deductible that you can afford to pay from your emergency fund. (You have one, right? If not, read this post on how to buildup an emergency fund without feeling deprived.) For many homeowners, the deductible sweet spot is $500 to $1,000.

• Policies don’t cover everything
  Flooding, mold, sump pump failure and sewage backups are excluded from many policies. Or, the coverage is very limited. There are also limits for fine jewelry and other valuables.
  
  Review your policy with your insurance agent to understand what’s covered and what’s not. If necessary, request an endorsement or rider to get the insurance you need. It will cost extra, but you’ll be covered.

• Bundling
  If you buy homeowners,auto, boat and life insurance from different companies, you could be missing out on discounts. On average, bundling saves 16 percent.

Check with your agent to see if bundling will reduce your premiums.

(FYI, as a Consumers member, you’re eligible for group insurance discounts through our partner, Nulty Insurance. Call 877.830.3099 or visit their website.)

• Inventory
  We know, it sounds so businesslike to take inventory of personal possessions. However, if you do need to make a claim, it will be much easier to replace your possessions if you have a record of what you lost. Here’s a how-to article that will help you take inventory with pen-and-paper or a smartphone app.
  
  Also, after you complete your inventory, cross-check the total value with what’s covered under your policy. Adjust your coverage if necessary.

When you determine how much coverage you really need and what deductible works for your budget, it’s time to comparison shop. Rates vary from insurer to insurer. A call to your agent­—or an hour or two of research on your own—­could save you big money.

Consumers helps more than 1,000 members finance land, homes, and home improvement projects each year. When you need a mortgage or home equity line of credit, call us at 800-991-2221. We’re here to help you get the home of your dreams!