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Do I Have Enough Homeowners Insurance Coverage?

11 Jun 2018, Posted by RRBH Law in Homeowners' Insurance, Insurance Litigation
homeowners insurance coverage

Determining how much homeowners insurance coverage you need can be a difficult process, but if something should happen to your home, being as accurate as possible is definitely worth the time and effort it takes. If disaster hits, you’ll want to not only have enough to rebuild the structure of your home but also to replace belongings, to cover living expenses while you rebuild, and to protect you against liability.

Here’s what you need to consider when buying homeowners insurance coverage:

Factors That Will Impact How Much Coverage You Need

A standard policy covers things like damage from storms, fire, and explosions. If flooding and earthquakes are common to the area you live in, you’ll need to purchase additional coverage.

You’ll want to make sure that the coverage you buy is adequate to completely rebuild your home. If your coverage is based on your mortgage amount—as required by some lenders—be sure that the amount is equal to or greater than the cost to rebuild.

To calculate costs, do some research on the following:

  • The total square footage of the structure (or structures if you have multiple buildings)
  • Local construction costs

Once you have these two figures, simply multiply them for a quick estimate. For a more detailed calculation, you’ll also want to factor in:

  • Exterior wall construction—masonry, wood, or veneer
  • The number of rooms and bathrooms
  • Whether any part of the home is custom-built
  • Roofing material
  • Any special features
  • Any improvements you’ve made

These factors will help you form a better representation of the costs.

Consider Your Possessions

A home is not just a structure—it is a space filled with memories, and many of those memories are tied to possessions. At any rate, your policy might not cover all of your possessions, which, when you add them up, can total a large sum of money. To make sure your possessions are protected by your homeowners insurance coverage, conduct a complete home inventory.

When you do your inventory, think about whether you’d like to cover your possessions for cash value, which would pay out less than you paid for older items, or for replacement cost. On average, replacement coverage costs about 10 percent more, though it’s worth it if you have many big-ticket items.

Other Factors to Think about When Buying Homeowners Insurance Coverage

In addition to protecting the structure of your home and your possessions, you’ll also want to consider whether the liability on your homeowners insurance policy is adequate. Liability coverage pays for bodily injury or property damage that you or your family members (including pets) cause to someone else. It also pays for the court costs and awarded damages associated with the harm caused.

Your home is central to your life. Ensuring that your homeowners insurance coverage is going to take care of you in the event of a disaster can help give you peace of mind. But sometimes the insurance company can wrongfully deny your claim. If that happens, give us a call. We’re on your side.

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