Most home owners recognize the importance of having insurance coverage for their homes. Homeowners insurance protects your investment and prepares you for unforeseen damage that may occur in the future. Of course, it can be hard to figure out exactly how much insurance coverage you need. The information below can help you to figure this out.
The Basics
Insurance coverage is often based on what you owe. In other words, the insurance coverage at a minimum will cover whatever you owe on your mortgage, but is that enough? Insurance coverage is based on the estimated cost to rebuild or repair your home in the event of a total loss. All homeowners insurance companies use rebuild cost estimators to establish appropriate limits of coverage for homeowners insurance policies. If disaster strikes, and unfortunately it often does, will you be able to rebuild? About 1 out of 20 homes have filed an insurance claim this year, and you could be next.
When you are reviewing your insurance coverage options, the old adage “plan for the worse and hope for the best” really applies. Consider what it would cost you to replace your home and all the goods inside of it. Basic coverage is enough to meet your mortgage holder’s requirements, but may not be enough to help you to start over.
What Do You Have Of Value Inside Your Home?
Homeowners insurance not only covers the structure of your home, but it also covers personal property loss in the case of a disaster. You should never undervalue the cost of replacing furniture and other goods inside your home. Most homeowners insurance policies will establish an adequate limit of coverage as a percentage of your home rebuild amount for your personal belongings, but it is still a good idea to take inventory of the personal items in your home.
A good activity to track all of the items in your home is to take a video of each room and all of your personal belongings once a year. If you were to have a fire and lose everything, you would want to make sure you didn’t miss a thing, like clothing, shoes, utensils, and kitchen items. All of these things are covered under your personal belongings.
Living Expenses
If your home was damaged by fire right now, how much would it cost to house you and your family while repairs were being made? This is an important consideration. You want a policy that will protect your family and your home fully. A good homeowners insurance policy should have Loss of Use coverage which will pay for you to live somewhere while your home is being repaired or replaced in the event of a covered claim.
Liability Coverage and More
Your insurance does not just cover your house. If someone slips on the ice coming up your front door, your dog bites the neighbor, or your child’s friend gets hurt in your backyard, you could face a lawsuit. You want to choose a plan that offers enough liability coverage to protect your personal assets.
There are a lot of things to think about when it comes to homeowners insurance coverage. Connect with Cole Harrison Insurance for help with making an informed decision about the amount of coverage you need.
