The once-a-year insurance review: what to check on home, auto and everything else

What a yearly review should cover

Once a year, check that your home's dwelling coverage still reflects the cost to rebuild, that your deductibles are amounts you could actually pay, that your auto liability limits match what you own, that every driver and vehicle is listed correctly, and that valuables and any umbrella policy are still set at the right amounts. Then compare the total premium with what other carriers would charge for the same coverage. Most problems people discover after a claim would have shown up in that one review.

At The Phoenix Insurance we review every client's policies each year, before they renew. It is one of the most useful things we do, and it is also something you can do yourself with an hour and the right list. Here is the checklist I use, in the order I use it.

Pick a date and pull three documents

The best time is about six weeks before your homeowners policy renews. That leaves time to ask questions, adjust coverage and compare quotes without the renewal date forcing a rushed decision. If home and auto renew at different times, review them together anyway, because the bundle and the liability limits interact.

Pull the current declarations page for your homeowners policy, your auto policy and any umbrella or valuables coverage. The declarations page is the one or two pages that list what is covered, how much and at what deductible. If you cannot find them, your agent or the carrier's online portal can send copies. Keep last year's pages nearby too; comparing the two years side by side is often where the surprises appear.

The house: coverage amounts, roof and deductibles

Start with the dwelling amount. It is meant to reflect what it would cost to rebuild your home after a total loss, which is different from its market value. If you have renovated, added square footage or upgraded finishes, that number may now be too low. If it jumped sharply at renewal with no change to the house, ask how it was calculated. The Texas Department of Insurance recommends replacement cost coverage to be fully protected, because actual cash value deducts depreciation and usually leaves you paying more.

Then look at the deductibles. In the Dallas area, the wind and hail deductible matters most, and it is often a percentage of the dwelling amount. Convert it to dollars. If your renewal premium rose and you want to know why, what to do when your homeowners renewal jumps walks through the likely causes.

Make flood a yearly question too, even if your lender does not require it. The Texas Department of Insurance notes that most home policies do not cover flood damage and that most flood policies have a 30-day waiting period before coverage begins. That waiting period is exactly why the annual review is the right time to decide, rather than the week heavy rain is in the forecast. If you decide against it, make that a deliberate choice you revisit each year.

• Dwelling coverage compared with a realistic rebuild cost
• Roof covered at replacement cost or actual cash value
• Wind and hail deductible converted to dollars
• Personal property coverage at replacement cost
• Endorsements such as water backup and their limits
• Liability limit on the homeowners policy

The cars and the people who drive them

Auto policies drift the fastest, because households change. Confirm that every licensed driver in the house is listed, including teenagers with a new license, and that drivers who have moved out are handled correctly. Confirm each vehicle, how it is used and where it is kept. A car that now sits most of the year, or one that became a commuter, may need to be rated differently.

Then look at limits. The Texas Department of Insurance sets the minimum at 30/60/25 and encourages drivers to think about buying more, warning that minimum limits might be too low after a serious accident. The same guide notes that all Texas auto policies include personal injury protection unless you reject it in writing, and that insurers must offer uninsured and underinsured motorist coverage, which you also must decline in writing. If you rejected either years ago, it is worth asking whether that still makes sense. Finally, look at the deductibles on each car. An older car that is worth little may not need collision coverage at all, while a newer one may deserve a lower deductible than the one you picked when money was tighter.

• Every household driver listed, and former drivers removed or adjusted
• Each vehicle, its use and where it is garaged
• Bodily injury and property damage limits compared with your assets
• Personal injury protection and uninsured motorist coverage, and any written rejections
• Comprehensive and collision deductibles on each car

Liability limits and the umbrella above them

Liability is the part of insurance most people set once and forget, while their savings, home equity and income keep growing. It is also the part that protects everything else you have built, which is why I put it in the middle of every review rather than at the end. Each year, ask whether a serious accident at your home or in your car could produce a claim larger than your limits. A new pool, a new teen driver, a rental property or a boat all raise the stakes.

If you have an umbrella policy, confirm that your home and auto limits still meet its requirements, especially if you changed carriers. If you do not have one, this is the moment to ask. I explain when it makes sense in why you might need an umbrella policy.

Valuables, collections and collector cars

Values change, and policies do not follow them unless someone updates them. Jewelry, watches and art can climb in value; a scheduled piece listed at its value from years ago may no longer be fully covered. Add any significant purchases or gifts from the past year, and note anything you sold. Homeowners policies limit what they pay for jewelry and art, as the Texas Department of Insurance notes, so new pieces may need their own coverage. I cover the details in what a homeowners policy really covers for jewelry, watches and art.

Collector cars deserve the same attention. If the market for your model moved, the agreed value should move with it, and appraisals need refreshing every few years. Check that mileage and storage still match the policy terms. For the full picture on the car side, see what a classic or collector car costs to insure.

Life changes that should not wait for renewal

The annual review catches drift, but some changes should trigger a call the week they happen. Coverage that matches last year's life can leave a gap the day something changes, and a claim in that gap is the hardest kind to fix after the fact.

Keep a running note on your phone during the year for anything on this list, along with the date it happened. When you call your agent, or when the yearly review comes around, that note turns a vague conversation into a quick, accurate update, and it keeps small changes from slipping through until a claim exposes them.

• Buying, selling or refinancing a home
• A new driver, a new car or a car sold
• A renovation, a new roof or a home addition
• A pool, trampoline or new dog
• Renting out a home or room, including short-term rentals
• Starting a business, especially one run from home
• A significant jewelry, watch, art or vehicle purchase

Your claims history, discounts and the price check

Once a year, look at your claims history the way insurers do. The Texas Department of Insurance explains that most companies use the Comprehensive Loss Underwriting Exchange, or CLUE, to see claims history, that you can get a free copy of your report each year, and that you can challenge wrong information. An error on that report can affect what you pay.

Then check discounts. The department notes that discounts vary by company and points consumers to its HelpInsure website to compare them. Common ones include bundling home and auto, a claims-free history and a security system, all of which our home insurance page lists. A newer roof or updated wiring can also matter to some carriers. Finally, compare the total price. Companies use different underwriting rules and rates, so the same coverage can be priced very differently from one carrier to the next.

How our yearly review works

For our clients, this checklist is our job. Before each renewal we look at the home, auto, umbrella, valuables and any business policies, check them against the changes in the client's life, and compare the market across the carriers we represent. If the coverage needs to change, we explain why. If the current policy is still the right one at a fair price, we say so and let it renew. Either way, the client hears from us before the renewal notice arrives, not after, so there is time to make a calm decision instead of a rushed one.

If you are not a client and would like a second set of eyes, our process is three steps: share your details and current declarations pages, let us review options from more than one carrier and tailor the coverage, then select your coverage. Our office on LBJ Freeway in Dallas is open 8:30 AM to 5:30 PM, and we work with households and businesses across Texas.

Questions people ask me