For instance, the addition of a room, new insulation, or just yearly inflation all increase the replacement cost of a house, while the actual cash value of the house may decrease over time. At least annually, check with the insurance agent who sold the policy, or, if the policy was purchased directly from the insurance company, check with the insurer to make sure the policy provides adequate coverage. When policyholders file a claim, the last thing they want to have happen is to have the claim reduced because they did not buy or maintain adequate insurance to receive full coverage. Those are the kind of surprises to avoid. It's called the Consumer's Guide to Homeowners Insurance .
Insurance agents are also a good source of information for the policyholder.