Too many people take their homeowner's insurance too lightly. They started the policy a few years ago when they bought their house. They reviewed it two years ago when they refinanced, and they haven't thought about it since. Housing replacement values grow over time, and you accumulate things that need to be insured. An annual review of your homeowner's policy — or renter's policy if you're renting — is very important.

Important Features

Your homeowner's coverage is meant to reimburse for the value of or make repairs to your home if something happens. This may mean reimbursing you for the cost of repairing damage after a fire or other disaster. It also may mean paying to replace articles that were lost from inside your home. Imagine the replacement cost of the things you cherish in your home. Insurance brings you back to where you were before the disaster.

If you live in a home with special construction or that has appreciated significantly in value, ask about replacement cost coverage. If you have special electronics, jewelry, or other expensive luxury items that you would want to replace if they were stolen or destroyed, schedule them with special coverage on the policy. Ask for identity theft resolution insurance — a small rider that is usually provided for free and that covers the costs of working through an identity theft situation.

Be sure your policy covers your kids' things at the dorm or in the apartment they're renting. Depending on the circumstances, you many need an additional policy for them. Make sure your parents are covered in the in-law apartment, too. If they aren't, they'll need separate coverage as well.

Be sure that you can talk to your agent, and that she is available and offers a high level of service, before you need her for a claim. Many agents specialize in several lines of coverage. Work with an agent that focuses on home, auto, and business to be sure you get the best service on your home coverage.

Money-Saving Tips

Making a home insurance claim for under $1,000 can cost you increased premiums in the future. Your emergency fund, not your homeowner's or renter's coverage, should be used for emergencies that cost $1,000 or less. Increase your deductible to $1,000 so that you're not paying for this coverage that you won't use.

Ask about discounts for having multiple policies through the same agent. Also ask for smoke alarm, burglar alarm, and nonsmoking household discounts, and upgraded utilities discounts, if they apply. Homeowner's coverage includes liability protection if someone is hurt on your property.

Home Office Considerations

Homeowner's insurance only covers personal activities. If your friend comes over for dinner and trips and hurts himself on the stairs, your homeowner's liability coverage will cover the damages. If the same friend comes over for a purpose related to your business and falls on the same stairs, your homeowner's policy may not cover it. If you have an office in your home, be sure you ask about special business-purpose coverage for liability and the loss of business-related items in your office.