Properly covering your home and your belongings can be difficult and some insurance companies may not provide the coverage you need. Finding the best policies for your home is pivotal and knowing how much homeowners insurance you need can save you financially.
Important options to assess are possible add-ons to your coverage that you may need. Insurance policies will keep your home covered for a basic array of risks and damages, but there are events left out of the basic homeowners insurance policy. Knowing which add-ons are best for you and finding the one that protects your home best will help in the long run.
Protect your home, and yourself from risks and damages properly. Talk with your insurance agent to discover which policy best fits your situation and provides the coverage you need to put your mind at ease. Cover your home and your assets today before disaster strikes.
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How much insurance should you have?
Homeowners insurance should cover the cost to rebuild your home which is known as your home’s replacement value. Your home’s replacement value is the total cost of local labor, materials required, and everything that affects the cost to rebuild your home as it was before a disaster. Your home’s replacement value is not the market value of your property. Covering your home with the market value in insurance will leave you severely under-protected.
Numerous factors go into determining your home’s replacement value. Factors like location, labor costs, materials readily accessible, home size, additions, etc. To find the basic cost to rebuild your home, find out your local construction cost per square foot and multiply it by your home’s square footage amount. This number is the bare minimum you should look to insure your home for but does not include any additions or special craftsmanship you may have added to your home.
Covering your home with enough insurance for a full rebuild from the ground up is the minimum recommended coverage for your home. Providing yourself with proper coverage for your belongings is as important as protecting your home. Personal property insurance goes by percentage of item insured. This means you can cover your belongings for 50% to 75% to 100%. Insurance companies cover your items from anywhere between, but it’s recommended you purchase coverage enough to fully replace your items.
Some items may pass your homeowners insurance coverage limits and might be too expensive to cover in your general property insurance. For these items, a scheduled belonging insurance may be required to cover that specific item. Other options include searching for an insurance policy that will fully cover all your belongings.
State by state add-ons
Most homeowners insurance policies will cover your home from fires, hail, or lightning. They will not include coverage from flood or earthquake risks as these are not typically common risks. That’s where insurance add-ons come in. If your home is in a state where floods are more common, your state might require homeowners to purchase a base form of flood insurance. These at-risk states are typically the east coast states or states like Louisiana who are prone to flooding.
If your state is at a higher risk for flooding, earthquakes, severe hurricanes, tornadoes, or any risk that isn’t covered by your basic insurance policy, you might want to look for insurance add-ons. Not every state that is considered at-risk of these disasters will require you to purchase this extra coverage, but it’s highly recommended to prevent having to pay out of pocket for repairs.
Find out which add on coverage your state requires and which policies are best for you and your home. If your state is at risk for a disaster not covered by your insurance, start shopping for policies that will protect your home for the future.
Recommendations for coverage limits
Some insurance companies will have coverage limits keeping you to a maximum amount you are allowed to protect your home for. If your home’s cost to rebuild is greater than your homeowners insurance maximum amount, you may want to seek out a different policy and insurance company altogether.
It’s more important to fully insure your home and your property and keep yourself protected in the face of disaster than to stick with the same insurance company. Cover your home’s replacement value and your belonging’s full replacement value if you can. If your insurance won’t offer you a policy for the necessary amount, look for extra coverage options like specific coverage for specific items or extra policies to fully protect your home. If the right policy isn’t offered, perhaps search for an insurance company who will protect you and your assets.
If someone is injured whilst on your property, your homeowners liability coverage will help cover any resulting costs. This will help cover medical costs and court costs if the situation arises. Most homeowners liability insurance policies will cover around $100,000 in expenses. The recommended amount, however, is anywhere between $300,000 to $500,000 covered.
Protecting your financial assets from liability loss is important and sometimes, the base insurance policy is not enough. Look to cover yourself with about $300,000 in liability coverage in the event of a lawsuit.
Properly insuring your home to its fullest amount is much better than being under protected. Knowing that you’re covered for any risk or damages that can occur will put your mind at ease and leave you fully covered. Talk to your insurance agent to know more about which policies are best for you and your situation.