If you have a terrible disaster and you lose your home, do you have enough homeowner’s insurance to cover the damage? Many people are finding out that they don’t. It’s happening because insurance companies have quietly cut back on what they cover with homeowner’s insurance. About five years ago, companies decided that they didn’t want to be in the “guaranteed replacement” business anymore. Insurers used to guarantee that they would rebuild your home from scratch if you lost it. But the wording has changed. The disclaimers you get in the mail now say the company will honor an “extended replacement” instead of “guaranteed replacement.” Extended replacement policies say that company will pay the amount you are covered plus 25 percent or 30 percent more. It sounds great. But if the damage is more than that limit, you have to pay the rest. You have to consider that the cost of construction goes up every year. So, if you’ve been in a home three or more years, the odds are that you’re underinsured. Just be sure that you call your company every year and increase the amount of coverage on your home. It’s going to cost you a bit more in premium money. But that’s better than paying a $50,000 out-of-pocket expense. It’s fairly easy to do. Insurers will usually just increase the coverage limit over the phone. Sometimes insurers choose to send out an appraiser before they increase the coverage. But calling each anniversary of your policy will usually do the trick. The other key is to raise deductibles on your insurance to the highest level. Homeowner’s insurance should only be used for major, catastrophic events. So, it’s okay to raise the deductibles as high as you can. That will reduce your premiums a bit, saving you more money.