Making sure your insurance fits

Nearly 60% of U.S. homes are inadequately covered. But it's not all about adding costs; sometimes life changes can save you money.

By MarketWatch

Insurance policies, like shoes, provide the most comfort when they fit well. Yet at least 32 million households in the United States own insurance policies that aren't right for them, according to the Insurance Information Institute. In fact, in 2006, 58% of homes were undervalued in their policies by an average of 21%.

But how can you tell if your insurance policy doesn't fit correctly?

A good time to test it is when you undergo a major change in your life. For example, if you've recently gotten married or divorced, it may be time to update your homeowners and life insurance policies. You could be eligible for a discount on your auto insurance if you've just tied the knot.

And don't forget to update your life insurance protection when you have a new baby -- one-third of households with new additions forget to do so.