Is it that time of year again? Time to review your homeowner's insurance policy to understand why the rate changed. Am I still getting the same coverage? Is there a cheaper company out there?

Too often I hear a client say that a higher dwelling coverage amount means better coverage. Unfortunately, this is usually not the case as the coverage amount only reflects the dollar amount the insurance company is willing to pay up to. What is more important is the types of losses that the policy actually insures the homeowner against. But who has time to read the policy!

One important coverage relates to water leaks and backup. Homeowners should look for policies that have water coverage as part of the policy. This means coverage related to broken pipes, appliance leaks or sewerage backup. Many companies have limited the amount they are willing to pay for these claims since they tend to occur commonly. Don't get this confused with flood insurance though. Flood losses are never covered under a homeowner's policy and are always a separate policy.

It is also important to review your coverage amount for both the home and your personal property to make sure there is adequate coverage. Also, be sure to review your discounts! I recommend you look at this information yearly.