How much home insurance coverage do I need?
You need enough homeowners insurance to cover the structure of your home and
your personal belongings, living expenses if something happens and damages your
home so you can live somewhere else while it is being repaired
You will need to have enough insurance to cover the cost of rebuilding your home
at today's prices. This does not include the price of the land and be sure not
to base it on the price you paid for your home. Some mortgage companies require
you get the amount of coverage that covers the consumer's mortgage. Be sure the
limit of the coverage is enough to cover the cost of rebuilding. Do not cancel
your homeowners insurance when the mortgage has been paid off because this home
insurance protects your valuable investment, your home.
A good and easy way to figure the amount of coverage you need is to multiply the
total square foot of your home by local building costs per square foot. In order
to find the construction costs in your area, call your insurance agent, builders
association or your local real estate agent.
Most home insurance policies will cover your personal possessions up to 50% -
70% of the amount of insurance you have on the structure of your home. In order
to make sure you have enough coverage for your personal belongings you need to
conduct a home inventory. A home inventory is a detailed list of everything in
your home and the cost to replace them in case of a disaster and they are
destroyed.
These are very important things to consider when you are determining the amount
of coverage you need in order to protect your home and your valuable belongings.