It is fine to buy a lottery ticket now and then. It is fine to take a chance on a football pool. One risk you don't want to take, however, is on your Home insurance. Most claims are going to be for broken windows and other minor issues. The real value of home insurance is against catastrophic loss. It loses that value if the coverage does not keep pace with the replacement cost of the home.

How can homeowners be assured that they are paying for sufficient coverage? Doesn't the policy increase automatically? The convenience of insurance payments going into escrow to be paid by the lending institution may render the level of coverage invisible to the average home owner. It is even possible for owners of newly constructed homes to be underinsured if the cost of construction has recently risen. Remember that lending institutions insist on coverage to balance their loss in case of fire, not yours. The wise homeowner makes it their business to keep track of their coverage, no matter who submits the premium.

There is a solution to the possible deficit in coverage. The type of home insurance you want to arrange is called Guaranteed Replacement Cost. This insures that in the event your home is completely destroyed, the cost of reconstruction will be covered in its entirety.

Have you considered the value of the contents of your home? A complete inventory of your possessions is an important component of the insurance process. The cost of electronics could be very significant if you have to replace everything you have amassed over time all at once. Furniture, artwork, musical instruments and jewelry all total more than you might imagine. Before you negotiate home insurance, make sure everything you own has been cataloged and documented. Take photos and file them electronically as well as the receipts to prove ownership and value in case of loss.

To make sure your home insurance coverage grows with the value of your belongings, perform an annual review. Discuss the results with your insurance agent. They will help you navigate your insurance options and even help you find lower rates when possible. Don't forget bundling discounts that save money.