Rebalancing protection means shifting premium dollars to pay for catastrophic losses while taking more personal risk for the smaller losses. It make sense to save money this way.
We use basically the same principle when configuring the protection balance between assets (home, cars, boats) and income (life insurance, disability income, long term care). It comes down to personal priorities.
The balance of protection people have between large losses and small losses needs to be adjusted periodically. Your objective should be limiting your exposure to large, catastrophic losses to your assets, income and family and take a bigger portion of the small loss — the small losses you can afford to handle on your own.
For example: Most people have what they believe to be an adequate amount of liability coverage, usually $100,000. In effect what is actually happening is they are making sure the insurance company pays all the small losses (under $100,000) with the insured willing to pay the really big losses, those worth more than $100,000. At the same time most insured’s select low deductibles on their possessions, in effect capping their exposure to loss at $500 or less. In this case the insurance company is only liable for the limited value of that possession. To improve catastrophic protection insureds can increase the percentage they pay on the smaller losses.
The best way to solve this problem is speaking with an insurance professional and building a long term relationship with that individual, so that he will be sensitive to the kinds of life changes that we all make over the long term.