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Ask the Home Insurance Expert

My home insurance company increased the amount of coverage on my home and the rates went up

You could, but you may end up underinsured. The amount of home insurance coverage you need is not based on the current market value of the home, but the cost to rebuild it in case a disaster (like if a tornado or fire destroys your home).

Home insurance companies generally adjust coverage levels when the estimated cost to rebuild your house increases. It's critical you have enough coverage to pay for the cost of replacement or you could get caught short. Make sure the amount would include bringing everything up to current building codes, for instance, and covering extra building expenses if you live in an area where construction is challenging, such as hilly terrain in downtown San Francisco. But don't factor in the land value -- only the cost to rebuild your home.

If you still think you're paying too much, compare some home insurance quotes for the same level of coverage.

You can also contact your current home insurance company to make sure you're getting all the discounts to which you're entitled. Some insurers offer discounts when no one in the home smokes, and many insurance companies give discounts for safety and security measures, such as deadbolt locks, burglar alarms and smoke detectors. If you're over 55 and retired, you might qualify for a senior discount.

Another way to save money is to raise your deductible. Get quotes for a range of deductibles to see how much you could save, and consider your financial circumstances. Don't go for a deductible you can't afford to pay out of pocket. Learn more about home insurance basics.

Last updated: Sep. 13, 2010