Your homeowners and auto insurance policies may be critical financial cushions in the event of damage or theft, making it essential to check them regularly to ensure that you still have the coverage you need.

Follow this guide to know when to review these policies and after which events to update them.

Revisit them annually

It’s always good to look over your homeowners and auto insurance policies at least once a year, which is simplest to do during the renewal period. Just before the end of your current policy, your insurer will send you a renewal statement with the updated terms and cost (whether you’re set up to automatically renew or not). Review this document carefully, noting anything that might necessitate a change in coverage. For instance, perhaps the value of some of your items has gone up and they are no longer fully covered under your homeowners policy; conducting a home inventory of your belongings and getting them appraised could help you determine this. You may also want to consider comparing quotes from other insurers to see if you could find a better rate. If you do decide to switch to another insurer, wait until after that new policy is in effect before canceling your old one.

New home or car

Anytime you purchase a new car, you’ll need to update your applicable policy. If it’s an extra vehicle, such as for a teen who just got their license, you can simply add it to your existing policy by contacting an agent or following the steps in your online account. However, if you’re swapping out your old vehicle, you will have to get a new policy for your new vehicle. Your auto insurance may provide a short grace period that will extend your existing coverage to your new ride.

This doesn’t mean you have to stick with your current insurer, though; feel free to shop around to find the best rate. Similarly, buying a home will require you to take out a new policy, which you will likely need proof of to obtain a mortgage. If you’re moving from one home to another, don’t cancel your previous coverage until a few days after you’ve moved out, just in case the purchase falls through or your previous home sustains damage during the move.

Home renovations and purchases

You’ll want to update your homeowners policy after any significant renovation, including a new roof, kitchen, or bathroom, to ensure that your insurance properly reflects the new replacement cost, or how much money might be required to rebuild your home if it were damaged. You may also need to update your policy’s dwelling coverage to reflect such changes—just note that doing so may increase your premium. Certain changes to your home, such as installing a security system or upgrading your home’s wiring or plumbing, can lower your premium in some cases. As for your belongings, if you purchase expensive items, such as fine jewelry, musical instruments, or art, make sure your coverage is enough to replace your losses should they be damaged or stolen. This may require getting an insurance endorsement or even purchasing an additional policy, so contact your insurer after any such fixes.

Milestones

Life changes such as the birth of a child, a new pet, an additional driver in your household, a marriage or divorce, or the launch of a home business can all affect your coverage. To ensure that you’re properly covered in such instances, connect with your insurer about what adjustments you may need to make based on the specific milestone.

When updating your policies, be sure to first reach out to your insurance agent, who can help you better understand your deductibles, coverage limits, and other terms. Insurance policies aren’t something you should set and forget—proactively reviewing them will help you keep your car and home suitably covered.