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For most homeowners, their house is the most valuable asset they own. Not only that, but a home is the place that people keep all of their stuff, so just about everything of value is inside it.

For that reason, it’s very important to have homeowners insurance. Most people buy this coverage when closing on their house since their mortgage lender requires it. But even those who have already bought an insurance policy may need to increase it periodically.

So, should you get more coverage in 2024? Here’s how to decide.

Has the cost of rebuilding the home increased?

Homeowners typically have dwelling coverage to pay for their property. This coverage would pay to rebuild or repair a home if a covered loss happens.

If a homeowner had replacement value coverage (as opposed to market value coverage), the insurer would pay the cost to rebuild. This is what most people should sign up for, rather than coverage that pays what the house is worth — even if it’s not enough to rebuild the home as it stands.

Even with replacement value coverage, there’s a policy limit, though. Say, for example, a homeowner had a $350,000 limit, but their home cost $400,000 to rebuild. The insurer would only pay a maximum of $350,000 minus any deductible if the house was destroyed.

Building costs have been going up. As of summer 2023, 82.5% of construction materials had seen cost increases since 2020 and the average price increase was 19%. Any homeowner who hasn’t increased the limit on their dwelling coverage yet may wish to talk with an expert about what rebuilding would cost — and should seriously consider increasing home insurance coverage to make sure the policy limit is high enough to pay for the entire rebuild.

Has the value of personal possessions increased?

Most homeowners have personal property coverage as well as dwelling coverage. Unsurprisingly, it pays to repair or replace their personal property.

This coverage for personal items also comes in the form of either market or replacement value coverage. Again, replacement value coverage is almost always the best option. After all, the market value of a 10-year-old couch is surely much less than it would cost to buy a comparable couch in today’s market.

Homeowners who have bought more personal possessions, or who have bought more expensive possessions, should think about increasing their coverage. It’s especially important to realize that most policies have lower limits for some property, such as a $1,500 or $2,500 cap on furs or jewelry or art. So, it’s very important for homeowners who have bought some of these possessions to think about getting special additional coverage for them.

Are any coverages missing?

Finally, homeowners should read their policy, see what coverages they have, and make sure they are fully protected against any losses they couldn’t cover easily out of their checking account if something went wrong.

Some common coverages people may forget to sign up for include:

• Additional living expense coverage, which ensures a homeowner has money to live elsewhere while the home is being rebuilt or repaired after a covered loss.
• Flood insurance, which is important for homeowners whose property might flood, since a standard policy won’t pay for this kind of damage.

Homeowners should read through their insurance agreement, consider the losses they’re most likely to experience, and talk with their insurer about adding coverage for any damages they aren’t protected against.

Any homeowner who finds they are without the coverage they need, or who has too little coverage based on policy limits, should reach out to their homeowners insurance company today, before it’s too late and they experience a loss their policy won’t pay for.

Our picks for best homeowners insurance companies

There are many homeowners insurance companies to choose from. We’ve researched dozens of options and short-listed our favorites here. Looking for a green build discount or easy bundle policies? Want an easy-to-use interface? Read our free expert review and get a quote today.