When was the last time you thought about your homeowners insurance? Most people shop around for an insurance policy once, and then file it away in a drawer—that is, until misfortune strikes. Under the stress of the situation, they don't always make the smartest decisions. Here's how to make sure you have the best possible policy, and also how to get the most out of it should the need arise.             

Shop Around

Do a price check every couple of years to see whether you can get a better premium from a different insurer. Fifty-two percent of survey respondents who changed companies in the previous 3½ years did so because switching saved money.

Don’t Forget Extra Coverage

The standard policy doesn’t cover everything. So you don’t wind up paying out of pocket for damage, you’ll need additional policies for flooding and earthquakes. Also, you may need separate policies for hurricanes, wind, and hail if you live in a high-risk zone.

If you have unusually valuable furs, jewelry, silverware, or artwork, consider getting a special endorsement or “floater” that will replace these items’ full value in the event of loss, theft, or damage.

And if you live in an older home, consider an ordinance or a law endorsement, which will help pay for the cost of bringing plumbing, wiring, or other key systems up to current building codes when rebuilding or repairing damage.

Make a Video to Protect Your Valuables

If you ever have to replace all your stuff after a household disaster such as a fire or flood, you’ll need to provide a detailed inventory of your belongings. But if the prospect of writing it all down as a precaution seems too daunting, grab your smartphone and make a video instead. Capture your furnishings, and don’t forget to open cabinets, drawers, closets, and boxes, describing aloud what you see as you record.

Include contents of bookcases, walls with art, and major appliances. And try to capture serial numbers and brand names, if possible, so that your insurer can replace what you had with exact or similar items. If your time is limited, focus on the big and the valuable, and skip, say, cleaning supplies inside the utility closet. An insurance adjuster is likely to create a “bulk estimate” for those things. Then store the video on the cloud or put it on a thumb drive and stash it in a safe deposit box or fireproof safe. Several insurers offer customers free web-based inventory storage tools.

Consider Whether to Make a Small Claim

If you absorb the cost of a small loss because you’re afraid that filing a claim will increase your premium, know that that’s not what happened to many CR subscribers. We surveyed 7,418 homeowners who had filed claims in the previous 3½ years, and 57 percent suffered no subsequent price hike if their claim was less than $5,000. Of those who saw an increase, on average premiums rose less than $150 per year.

Don't Over-Insure Your Home

Don't insure your home for its current market value—should something happen and your home is destroyed, the cost to rebuild would likely be much lower. Typically, a home that's completely destroyed by, say, a tornado may still have its foundation intact.