Is your homeowners policy under water?(CR money)

If you own a home, its value has increased 24 to 67 percent, on average, just in the last five years. But if you haven't updated your homeowners insurance and a disaster occurs, those big gains could evaporate.

About 64 percent of U.S. homes--45 million--are underinsured, according to Marshall & Swift/Boeckh, a Wisconsin company that tracks rebuilding costs for insurance companies. That means the face value of the policy will not be enough to finance reconstruction of the dwelling. The average shortfall is 27 percent. So if your house is insured for $200,000, rebuilding would cost nearly $275,000, leaving you to pay about $75,000.

The major source of disparity between the face value of your policy (the amount you think you need to rebuild your home should a disaster claim it) and replacement cost (the amount you really need to rebuild) is a stiff increase in building costs. To find out which homeowners are at greatest risk, CONSUMERS REPORTS hired Salt Lake City-based ITV Solutions and Castle Inspection Service, providers of replacement-cost and property-valuation data to the insurance industry, to map the changes in construction costs over the last three years in all 3,141 counties in the 48 contiguous states.

The red areas on the map at right indicate where replacement costs have risen the most. If you live in one of those areas and have not increased the amount of coverage on your home since March 2000, replacement costs may have outpaced your coverage by 21 to 40 percent.

Your coverage may have sunk further underwater if your home was built before 1940 (when better craftsmanship and higher-quality materials were the norm). Nor might you have enough insurance if you've remodeled recently (thereby increasing the value to be replaced).

Insurance companies have implemented a change that could also leave policyholders underinsured. Previously, insurers guaranteed to replace your home no matter what the cost, as long ...