Time to review your homeowners policy

"War and Peace." "Crime and Punishment." "The Sound and the Fury."

All great books you've probably never read.

If you're like most homeowners, you can add another unread title to your must-read list: your homeowners insurance policy.

"So many people never look at it because their mortgage company pays their premiums," says Madelyn Flannagan, vice president for education and research at the Independent Insurance Agents and Brokers of America, or IIABA, in Alexandria, Va. "The homeowners insurance market has been changing with things like mold. If your state is going to allow companies to exclude those things and you weren't aware because you didn't open your policy and see that little red sticker on the front, who's at fault?"

An August 2005 IIABA survey found that at least 32 million U.S. households had ill-fitting insurance policies. Some were over-insured, others had major gaps in coverage. Fewer than 60 percent of respondents had performed "a comprehensive review" of their insurance coverage in the last two years, 16 percent had not done one since 2002, and 16 percent had never done one at all. (The remainder couldn't recall.)

If you haven't peeked at your coverage since the Clinton era, you might suddenly find yourself reading a real-life thriller. For starters, Flannagan says, sweeping changes to the home casualty industry two years ago, stemming from 1992's Hurricane Andrew, bumped rates by 15 percent to 25 percent, the largest increase in 20 years.

Robert Hunter, director of insurance for the Consumer Federation of America, says home casualty companies have also shifted more of the risk to consumers. Some companies now cap what they're willing to spend to rebuild your home but allow you to "buy up" additional coverage to protect against Katrina-esque skyrocketing rebuilding costs. Spiking liability claims for dog bites, mold and risky swimming pools and trampolines have caused further pullbacks in coverage for those hazards, as well.

"There are rate increases, but in many cases they are hidden as coverage reductions, which are the same thing as a rate increase," says Hunter. "We are concerned that the industry has moved in the direction of laying more risk back on consumers."

Renewal time is the best time to read your policy, review your homeowners coverage with your agent, and perhaps shop around for a better or cheaper policy. It's also when your insurer can bump your rate or make changes to your coverage.

"There are huge variations in costs from equally strong companies," says Stephen Pollan, personal finance mentor and author of the best-selling books "Die Broke" and "Live Rich." "Probably the best company around is Chubb, but you can get the same kind of coverage for about 30 percent less if you shop."