Over the past several years, home values have declined across the board. According to an article in Daily Finance, “Since the real estate market hit its peak in June 2006, home values have plummeted 29.5%, according to Zillow.com.” I’m willing to bet that your insurance coverage did not decrease in tandem with the market. If anything, your coverage either stayed the same, or increased, even while the value of your property declined. This means your premiums probably increased as well.
Now is a good time to contact your insurance agent and ask for a comprehensive review. Find out the value of your home and check to see if you are over-insured. My guess is that rates will trend upward based on events such as freak hailstorms, surprise earthquakes, and predictable hurricane damage. If you reduce coverage based on a more accurate home value, your premiums may remain close to your current amount, even when rates increase due to claim activity. Even if your coverage is on target, it never hurts to get a periodic review.