YOU ASK:

How much home insurance do I need?

WE ANSWER:

This is the first and most crucial question you should ask yourselves before you start shopping around for home insurance. The amount of home insurance coverage to purchase should be neither more nor less than what you will need to replace your home and its contents in the potential event that they are damaged or destroyed.

Ways to Determine How Much Home Insurance You Need

  1. The first step you can take is assess the replacement value of your lodgings, including any adjacent structures but not the price of the land. When looking for home insurance, you should insure your dwelling for 100 percent of the amount it would cost for it to be replaced. Have a realtor come over and assess exactly how much money you would need to rebuild your home. Take into consideration the current construction and material prices, which are subject to inflation. Don't forget to review your home policy every time you make any improvements to your home, and increase your coverage limits so that they reflect the updated value of your home.
  2. The second thing you should consider is getting adequate protection for the contents of your home. Home insurance policies provide coverage of personal property of about 50 percent of the coverage amount on the dwelling. To see if this coverage will be enough, you can do an inventory of all your personal belongings, such as electronic equipment, furniture, and any valuables, such as jewelry, paintings, furs, etc. Keep the inventory, and any pictures thereof, at a safe place outside your home.
  3. Home insurance exclusions are equally as important as its coverages. Carefully go over all the policy exclusions and check to see if the causes-of-loss your house is exposed to are specifically excluded. If they are, maybe it is possible for you to add them by purchasing a special endorsement. Also, note that no homeowners policy insurers against flood so if you live in a flood zone, you should contact the local insurance providers to see if they sell special flood insurance.
  4. Accidents happen all the time, therefore, as a home owner, you need to be insured against liability to other people who might sustain injuries while being on the premises of your property.
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