Why You Should Review Your Homeowners Insurance

2. Building codes have changed

The older your home is, the greater the chance that it doesn't satisfy upgraded building codes, such as those meeting standards for resistance to fire in California or wind in Florida. The usual replacement-cost coverage generally doesn't include the extra expense of meeting codes adopted after your home was originally built. So you should add on building code coverage (also called building law or ordinance coverage) if you might have to comply with new requirements.

3. You inherited your mother's jewelry

Standard homeowners insurance policies usually have limited coverage, often $2,000 or less, for all your jewelry. Kevin Lynch, a faculty instructor at the American College of Financial Services, recommends that you cover your valuable items, including jewelry, with a separate personal-articles policy, which is designed to protect against not only theft but also other mishaps, like losing a ring while swimming. If the value of an insured item has little relation to the original price paid, you should get it appraised, Klock says. In other cases, original receipts along with a photo or video of the item may be sufficient.

4. You are increasingly worried about natural disasters

Floods, tornadoes, wildfires, earthquakes, you name it.

Fire — wild and otherwise — and wind damage are usually covered under a standard policy. But flood damage, including the kind that may come with a hurricane, is likely excluded. So if you live in a flood zone, consider purchasing flood insurance. The cost of coverage varies, but on average it's $700 per year for a primary residence. (Visit the government's FloodSmart.gov site to learn what the flood risk in your area might be and how to buy insurance.) Earthquake coverage requires an additional premium on your homeowners policy; costs vary widely depending on location.

5. You downsized to a condo

If you're insuring a condominium unit, Klock says, the key thing to know is what type of insurance your homeowners association (HOA) has in place. At minimum, it might be a type called “bare walls,” which basically covers only the shell of the building around your unit. At most, it might also cover improvements or additions you've made to your unit. Once you know the HOA's level of coverage, you can buy a condo insurance policy that dovetails with your HOA's.

6. You downsized to a rental

A standard renters policy generally covers everything in a homeowners policy other than the structure itself — for example, possessions and the cost of living elsewhere if you're temporarily displaced by a fire or other calamity. “This is really important,” Klock says, because the landlord's policy will cover repairs, but not your belongings.

“Without a renters policy, you would need to sue the landlord for damages,” he says. “And lawsuits are typically only successful in cases of landlord negligence.” Renters insurance is relatively cheap: The average annual U.S. premium is $180, compared with $1,211 for a homeowners policy.