Why a regular insurance review matters

Insurance is a promise to transfer financial risk. That promise only works if the policy you carry matches your present exposure and goals. Life changes, market prices, building values, and insurer rules shift over time. An annual, structured review prevents unpleasant surprises after a loss and can uncover ways to lower premiums without sacrificing protection.

In my 15+ years advising clients, routine reviews are the single most reliable habit that reduces both out-of-pocket losses and wasted premium dollars. I’ve repeatedly seen consumers discover missing coverages (for example, separate flood or earthquake policies), outdated limits on homeowners policies, or life policies with unused riders.

Sources: Consumer Financial Protection Bureau (CFPB) guidance on comparing insurance options and the Insurance Information Institute (III) on flood exclusions provide context for common coverage gaps. (See: https://www.consumerfinance.gov and https://www.iii.org.)

A step-by-step checklist to review insurance policies

Use this checklist as a working script. Take notes, date each review, and store them with your policy files.

1. Gather documents

• Locate the declarations page (the “dec” page). It summarizes who’s insured, policy period, limits, deductibles, and premiums.
• Collect full policy forms, endorsements, riders, and any recent notices from the insurer.
• Pull recent appraisals, repair estimates, vehicle titles, mortgage statements, and beneficiary designations.

1. Verify the basics

• Named insured(s) and additional insureds: Are the correct people and entities listed?
• Policy period and renewal date: When does the policy renew or cancel?
• Mortgagee/loan holder and loss payee clauses: Lenders must be listed correctly on homeowner and auto policies.

1. Confirm coverages and limits

• Limits: Are limits adequate for replacement cost, not just current mortgage balance? For liability, consider your net worth plus future earnings.
• Dwelling coverage vs replacement cost: Verify if your homeowners policy offers replacement cost or actual cash value. If replacement cost, confirm whether it’s guaranteed.
• Auto liability, UM/UIM (uninsured/underinsured motorist), PIP/medical payments: Confirm state minimums and consider higher coverage to protect assets.
• Umbrella/excess liability: Check attachment points and whether personal umbrella would meaningfully improve protection.

1. Check exclusions, sublimits and endorsements

• Exclusions: Look for flood, earthquake, wear-and-tear, business activity at home, or professional liability exclusions.
• Sublimits: Jewelry, antiques, electronics, and other high-value items often have lower sublimits unless scheduled.
• Endorsements/riders: Confirm purchased add-ons (e.g., ordinance & law coverage, foundation/sewer backup, rider for a collectible) are present and active.

1. Inspect deductibles and cost-sharing

• Deductible affordability: Higher deductibles lower premium but increase your out-of-pocket exposure. Recalculate how much you could pay in a worst-case claim.
• Coinsurance or percentage clauses: Common in commercial and flood policies—know the penalty triggers.

1. Assess premiums and discounts

• Premium trends: Compare current renewal premium to previous years and ask for detailed reasons for increases.
• Discount eligibility: Multi-policy, claims-free, safety devices, new-homeowner, defensive driving—confirm you’re enrolled.
• Shopping: Obtain at least two competitive quotes when premiums rise or coverage changes.

1. Claims history and insurer service

• Claims record: Review your own claim history and note whether previous losses affected insurability or premiums.
• Customer service: Check how quickly your insurer responded previously, how they handle settlement disputes, and independent ratings (AM Best, J.D. Power).

1. Special coverage checks

• Flood and earthquake: Most homeowner policies exclude these perils; check separate policies or the NFIP (flood) options.
• Business activity: Home-based business exposures often need separate coverage or endorsements.
• Health plans: Verify networks, prescription formularies, prior authorization rules, and out-of-pocket maximums.

1. Beneficiaries, policy loans and riders (life & annuity)

• Beneficiary designations: Confirm they reflect your estate plan and that contingent beneficiaries exist.
• Cash value and loans: For permanent policies, review accumulation, loan interest, and potential lapse risk.
• Rider review: Disability waiver of premium, accelerated death benefit, conversion options—note any upcoming opt-in deadlines.

1. Document action items and set follow-up

• Create a prioritized to-do list (e.g., schedule jewelry appraisal and endorsement, raise auto UM limits, shop for umbrella policy).
• Note renewal dates and set reminders 60–90 days before renewal to allow time to shop.

What to ask your agent or insurer (scripted questions)

• “Can you walk me through the declarations page and any recent endorsements?”
• “Are there exclusions or sublimits I should be aware of for this property or item?”
• “What discounts are available and which have I already been credited for?”
• “If I increase my liability limits or add an umbrella policy, what will the premium change be?”
• “Has any recent claim affected my eligibility or future rates?”

Bring a printed list of these questions to your meeting or email them ahead of time.

Common mistakes and red flags

• Assuming flood is covered by standard homeowners insurance—typically it is not. See the National Flood Insurance Program (NFIP) and state guidance.
• Keeping limits tied to an old mortgage balance instead of current replacement cost.
• Not scheduling high-value items, leading to low sublimits at claim time.
• Ignoring endorsements or policy language received in renewals—some changes may narrow coverage.
• Rapid or large unexplained premium increases without explanation.

If you encounter persistent service problems or unfair practices, contact your state insurance department. You can also consult the CFPB for consumer protection resources (https://www.consumerfinance.gov).

Cost-saving strategies that don’t sacrifice protection

• Bundle home and auto with the same insurer for a multi-policy discount.
• Increase your deductible only when you can afford the out-of-pocket hit for smaller claims.
• Install and document loss-prevention devices (alarms, deadbolts, sprinklers) to qualify for discounts.
• Consider a personal umbrella policy, which often offers broad liability protection for a modest premium relative to the added limit.
• Shop the market at renewal time—obtain competitive quotes and use them to negotiate with your current insurer.

Real-world example

A homeowner I advised discovered that their dwelling limit matched the original purchase price rather than the true replacement cost. After a quick contractor estimate and a one-page appraisal update, we increased replacement-cost coverage and added a sewer-backup endorsement. The premium rose modestly, but the household gained several hundred thousand dollars of real protection and a peace-of-mind value far above the added cost.

How often should you review policies?

• Annually: make this a calendar item.
• When a life change happens: marriage, divorce, birth/adoption, home purchase, renovation, inheritance, retirement, new business activity.
• After a claim: confirm changes and update exposures.
• At renewal: review the full policy packet every time you receive it.

Sample checklist you can copy

• [ ] Locate declarations page and save a digital copy.
• [ ] Confirm named insured and mortgagee details.
• [ ] Verify limits and replacement-cost assumptions.
• [ ] List exclusions and scheduled items.
• [ ] Review deductibles and calculate out-of-pocket affordability.
• [ ] Check beneficiary designations (life policies).
• [ ] Compare renewal premium vs market—get two quotes if premiums increased >10%.
• [ ] Identify applicable discounts and enroll.
• [ ] Schedule follow-up actions and set a calendar reminder.

Helpful resources and related guides on FinHelp.io

• For homeowners: see Designing an Insurance Layering Strategy for Homeowners for ideas on stacking coverages and using endorsements. Designing an Insurance Layering Strategy for Homeowners

• To find hidden vulnerabilities: read Insurance Gaps: How to Identify Hidden Vulnerabilities in Asset Protection for common blind spots. Insurance Gaps: How to Identify Hidden Vulnerabilities in Asset Protection

• If you are evaluating add-ons: Evaluating Insurance Riders and When They Make Sense explains common riders and when to buy them. Evaluating Insurance Riders and When They Make Sense

When to get professional help

Consider a licensed independent agent, broker, or a certified insurance counselor if:

• You have complex assets (rental properties, small business, high net worth).
• You own specialized items that need scheduling (art, jewelry, collections).
• You need help coordinating employer benefits with private plans.

In my practice, clients with complex exposures benefit from an annual meeting that pairs a policy review with a short, written risk inventory.

Disclaimer

This article is educational and does not constitute personalized insurance, legal, or tax advice. For tailored recommendations, consult a licensed insurance professional or your state insurance department.

Sources and further reading

• Consumer Financial Protection Bureau — Insurance consumer guides: https://www.consumerfinance.gov
• Insurance Information Institute — Consumer resources: https://www.iii.org
• National Flood Insurance Program (NFIP) — Flood insurance basics: https://www.floodsmart.gov
• State insurance department consumer pages (check your state’s official website for filing complaints and rate information)