You cannot afford to pay just the premiums each year and otherwise forget about your homeowner's insurance. Check your coverage annually, and update it periodically if housing prices rise and the replacement cost of your home goes up. If you have bought a fixer-upper and have done extensive — and expensive — remodeling, or if you have purchased new furnishings, check your insurance package. An inflation-guard policy that automatically adjusts your plan each year to cover rises in building costs covers only inflation, so do not rely on that for total security.