8 Signs It’s Time to Update Your Home Insurance Policy

*Updated January 21st, 2025

Keeping your home insurance and homeowners insurance policy up to date is essential for protecting one of your most valuable assets. When your insurance policies no longer reflect your current living situation, value of your home, or risk exposure, you may be underinsured or left with gaps in home insurance coverage. Life or property changes, home improvements, and rising home values are common reasons you may need to update and update your homeowners insurance.

Failing to adjust coverage after major changes can impact your ability to file a claim, increase insurance premiums, or leave you paying out of pocket for repairs. That’s why it’s smart to review your home insurance and check your policy at least once a year.

Why Updating Your Home Insurance Matters

A current home insurance policy ensures you have enough coverage in the event of damage, theft, or liability claims. Many existing homeowners assume their current policy remains accurate forever, but insurance companies often adjust rebuild costs, risk models, and underwriting guidelines.

Coverage Alignment With Property Value

As value changes due to inflation or upgrades, your dwelling coverage should reflect the true replacement cost — not just the market price. If your policy limits don’t match the value of the property, you could struggle to repair or replace your home after a loss.

Preventing Gaps From Unreported Changes

Major purchases, home renovations, or lifestyle adjustments can affect your coverage if you fail to give your insurance company know about them. A simple call to contact your insurance agent can prevent a costly lapse in coverage.

Maintaining Liability Protection

Life events such as working from home, starting a home business, adding a pool, or getting a dog can increase liability insurance needs. If your liability coverage doesn’t reflect these risks, you may need additional protection.

Securing Eligible Discounts

Installing a new roof, security systems, or smart devices may help lower your premium. However, your insurer won’t apply these savings unless you let your agent know about upgrades.

7 Signs You Need to Update Your Home Insurance Policy

These 7 signs you need to review your homeowners policy can help identify when it’s time to update your policy and adjust coverage limits.

You’ve Completed a Renovation or Home Improvements

A kitchen upgrade, room addition, or bathroom or kitchen remodel increases your home’s rebuild value. If you don’t report a renovation, your policy may fall short during a claim. According to the Insurance Information Institute, homeowners should notify insurers immediately after major upgrades.

You’ve Purchased High-Value Items

Jewelry, electronics, and collectibles often exceed standard coverage limits. Without endorsements, you may lack coverage in the event of theft or damage. Maintaining a home inventory helps ensure sure your coverage reflects current belongings.

Your Home’s Replacement Cost Has Increased

Construction material costs and labor rates continue rising. If your policy uses actual cash value instead of replacement cost, you may receive reduced claim payouts. Many insurance companies provide rebuild calculators to help evaluate proper coverage.

You’ve Added Safety or Security Features

Alarm systems and smart technology can help secure your home and qualify you for a discount. These upgrades may also reduce insurance rates could apply to your policy.

You’re Running a Business From Home

Standard homeowner’s insurance rarely covers business equipment or client liability. You may need an insurance endorsement or separate commercial policy to protect business assets.

You’ve Experienced Significant Life Changes

Marriage, divorce, or adding household members can affect your insurance needs. These significant changes often require updated named insureds or revised coverage amounts.

It’s Been Over a Year Since You Reviewed Your Coverage

Experts recommend homeowners review your coverage annually to account for inflation, new discounts, and policy updates. Even typical homeowners benefit from reviewing their policy regularly.

How to Review and Update Your Home Insurance Policy

To update your home insurance, follow these simple steps:

• Take inventory of valuables and major purchases

• Review recent home renovations

• Identify new liability risks

• Review your policy with an independent insurance agent

• Compare quotes if switching to a new insurer

Your insurance agent can help you adjust your coverage, evaluate policy limits, and determine if umbrella or specialty coverage makes sense.

Frequently Asked Questions

How Often Should I Review My Home Insurance?

You should review your home insurance and review your coverage at least once per year. Annual reviews help ensure coverage keeps pace with rising home values and rebuild costs.

Do Renovations Automatically Update Coverage?

No. You’ll need to update your policy manually. After major home improvements, insurers require documentation before increasing dwelling limits.

Will Updating My Policy Increase My Premium?

It depends. Adding coverage can raise your premium, but safety upgrades may unlock a discount. Some homeowners offset costs by bundling auto insurance or adding an umbrella policy.

What Happens If I Don’t Update My Policy?

Failing to update may leave you underinsured. If you need to file a claim, outdated limits could result in partial reimbursement or claim denial.

Final Thoughts

Home insurance isn’t something you buy once and forget. As your life, property, and risks evolve, so should your insurance coverage. Making it a habit to review your policy, contact your insurer, and adjust coverage after major changes ensures long-term protection and financial security.

Taking time to update your homeowners insurance annually keeps your coverage aligned with real-world risks — and helps ensure you’re fully protected when it matters most.