Yet coasting by with the coverage you picked up when you first bought your home—and likely had more pressing matters on your mind—can have unpleasant consequences. Nearly two-thirds of people have no idea what their homeowners policy fully covers, and 45 percent of respondents to an industry survey said they’d had a claim denied because they lacked proper coverage.

Whether you own or rent your home, these steps can help you weigh the merits of your current policy or shop around for one that’s better suited to your needs and budget.

For the highest level of coverage, you want an “all-risk” or “open perils” policy. This type of insurance will cover property damage or loss incurred from all events except those specifically excluded in the contract (more about that later). A “named perils” policy, on the other hand, will help out only in specific situations, usually making it more affordable.

Policies can also differ in how they calculate the amount they’ll pay out to cover damage or loss. “Replacement cost value” insurance is intended to reimburse you for the full cost of buying the exact or a similar version of what you’ve lost. “Actual cash value” insurance, however, provides a sum equal to your possessions’ current worth, taking into account that they lose value over time. In other words, you’d likely receive less than you would with replacement cost coverage.

Most standard home insurance provides replacement cost value coverage for the dwelling but actual cash value coverage for your belongings. That means you’ll have to shell out more if you want full replacement coverage on everything.

The dollar amount listed in your policy that covers damage to your home’s structure should reflect the current costs in your local market to rebuild your home from scratch—not its appraised value, its estimated sales price or what you paid for it years ago. Loretta Worters of the Insurance Information Institute, an industry trade group, recommends corroborating an insurer’s suggested coverage limit by learning your area’s per-square-foot building costs. You can get this figure from a local contractor, real estate agent, builders association or insurance agent, then multiply it by the home’s total square footage.

“We find that after a disaster, two-thirds of people are underinsured by an average of six figures,” says Emily Rogan, senior program officer with United Policyholders, an insurance consumer advocacy organization. “People have to come up with creative ways to fill that gap to rebuild.”

Damage caused by flooding or earthquakes typically isn’t covered in standard all-risk policies for owners and renters, so you need a separate policy for protection from such disasters, says Douglas Heller, director of insurance for the Consumer Federation of America.

Depending on your mortgage lender and location, you may be required to buy this extra coverage. To check if your area is considered high risk for flooding, consult the Federal Emergency Management Agency’s Flood Map Service Center (msc.fema.gov). Even if you don’t live in a high-risk spot, you may want to add this insurance, since 25 percent of National Flood Insurance Program claims come from areas with moderate to low risk. To assess your earthquake risk, see the U.S. Geological Service’s hazard map for your state (at usgs.gov/programs/earthquake-hazards/information-region). There’s no simple rule for determining whether you need earthquake insurance. Just know that the lower the risk in your area, the lower the premium will be.

As your home ages, consider adding “building code upgrade” coverage or, as it’s also known, ordinance or law coverage. Standard homeowners insurance normally won’t help with the costs of repairing or reconstructing the property to meet your area’s current building regulations, says Rogan. So if coastal homes in your town now need to be elevated and yours is not, the rebuilding expense would fall on you. According to United Policyholders, this add-on will usually get you an extra 10 percent in dwelling coverage or a flat amount, like $25,000, depending on your policy.

You may also need to increase protection on the contents of your residence. Most home insurance policies set the amount of coverage at between 50 and 70 percent of your dwelling limit, while renters can typically select amounts ranging from $10,000 to $500,000.

To determine how much you need, Heller recommends recording yourself as you walk through your home, describing what you see, when you bought it and how much it cost. This will help you estimate the value of your most important possessions and provide a handy record should you need to file a claim. Or you can use a free home inventory app, such as one of those offered by Encircle or the National Association of Insurance Commissioners (NAIC), which will catalog items and store photos and receipts. United Policyholders also offers a more detailed spreadsheet (go to uphelp.org and search for “how to create a home inventory”). High-worth items, such as a piece of art or an engagement ring, will likely require special coverage.

Seventy percent of homeowners, Deloitte found, hadn’t changed carriers in the prior three years. To improve your chances of nabbing the best coverage at the best price, get restless, says Heller. Ask for quotes from at least three different companies every two years. If you don’t want to call insurers directly or visit their websites to obtain quotes, you can work with an insurance agent or broker. A captive agent will offer you products from a single company, while an independent agent or broker can provide options from more than one insurer.

Heller recommends checking an insurer’s financial strength in case it will have to pay many claims simultaneously—say, after a big disaster. You can do this for free on the website of Weiss Ratings (weissratings.com), which gives letter grades to different companies. To get a sense of how easy an insurer will be to work with, use the NAIC’s search tool and see how it ranks on the group’s complaint index. (Go to content.naic.org, click on Consumer, then Consumer Insurance Search.)

Increasing your deductible and shopping around aren’t your only options for saving money. Many insurers offer discounts for setting up automatic payments, opting for electronic billing, being a member of a certain credit union or professional organization, installing a new security system or putting on a new roof, says Stephen Crewdson, senior director of the insurance intelligence group at J.D. Power. Ask your insurer about discounts, and share any improvements you’ve done that have made your home safer or more resistant to damage. 

You might also consider taking out multiple policies from the same insurer. Research from Insurance.com and Quadrant Data Services found that bundling auto and home insurance with the same company saved people an average of 15 percent.