Signs You Need to Update Your Homeowners Insurance in 2023

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KEY POINTS

  • How much coverage a homeowner needs can change over time.
  • It's best to review homeowners insurance coverage regularly to make sure it's still enough.
  • You may need to update coverage if housing costs in your area have risen, if you've remodeled your home, or if you think you can find a better deal with a different company.


Be honest -- it's been a while since you looked at your insurance coverage, hasn't it?

I've been writing about homeowners insurance for years, and I'll be totally honest with you: It's not an interesting subject. I don't enjoy sifting through page after page of legalese any more than the next person. So I get the temptation to just pay your home insurance premiums and then completely forget about it until the next policy term.

But I also know how costly that approach can be when something goes wrong. That's why it's important to regularly review homeowners insurance coverage to ensure it's still a good fit, even if it's a little dull. If any of the three things below apply to you, it's probably time to revise your home insurance coverage.

1. Housing costs have risen significantly in the area recently

The whole idea of homeowners insurance is that it's supposed to help pay for a total rebuild of the home if necessary so the homeowner doesn't have to pay for this on their own. But the cost of rebuilding or even repairing a home can change due to several factors.

Inflation drives up the cost of everything over time, as we've all seen this year. Supply chain issues, like we saw during the pandemic, can affect the availability of building materials, and when demand exceeds supply like that, manufacturers raise their prices.

Costs may also increase in areas prone to natural disasters. In areas that experience flooding or hurricanes, entire neighborhoods may have to call on their homeowners insurance at once, putting a huge strain on builders and repair companies in the area.

So what once may have been an adequate level of homeowners insurance may no longer be enough due to one or more of the factors discussed above. In this case, homeowners may not need to take their business elsewhere if they like their insurer. But they might want to think about upping their policy limits.

2. You've added onto or remodeled the home

Adding onto a home or remodeling it can affect how much it would cost to rebuild it with similar fixtures. As a result, homeowners will need more insurance coverage in order to make sure they're protected against a total loss.

It's wise to increase policy limits during or soon after a remodel or addition to ensure the home is properly protected at all times. Homeowners who aren't sure how much to increase their limits by could reach out to their insurance agent to help. A local builder may also be able to advise a homeowner on how much it would cost to replace the home as it currently stands.

3. You think you could get a better rate elsewhere

Homeowners insurance companies all look at the same information when deciding how much to charge a homeowner for coverage. But each company has its own formula for weighing risk. Some companies might charge homes in certain ZIP codes more than another company. Others might charge a much higher rate to homes with pools due to the liability risk these bring.

The only way to know what a company will charge to insure a specific home is to get quotes. This often means contacting insurers by phone, since few insurers offer online quote tools for homeowners insurance. But some extra assistance isn't a bad thing, especially for homeowners who aren't sure how much coverage they need.

It's not a bad idea to get some homeowners insurance quotes every year or two just to see how they stack up to the homeowner's current premiums. If the current insurer is still cheaper, there's nothing more to be done. But if another company offers a better rate, the move could free up some extra cash every month while still offering strong protection for the home.

Looking for new homeowners insurance doesn't have to take a lot of time. Pick out a few companies to get quotes from and then set aside some time to make a few calls or get quotes online if that's a possibility. Then, compare the policies side by side to see which offers the best deal.

Our picks for best homeowners insurance companies

There are many homeowners insurance companies to choose from. We’ve researched dozens of options and short-listed our favorites here. Looking for a green build discount or easy bundle policies? Want an easy-to-use interface? Read our free expert review and get a quote today.

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