Most people don’t know how much it would cost to rebuild their home and replace their belongings after a total loss. The thought of determining local building costs and thoroughly cataloging all of their possessions can seem overwhelming. As a result, homeowner coverage is often based on assumptions. Either a rough guess or a default percentage of the home’s structural value set by the insurance carrier.
Protect your investment by playing an active role in determining the amount of insurance you need to cover the following:
The structure of your home
It would help if you had enough insurance to cover the cost of rebuilding your home at current construction costs. Don’t include the value of the land, and don’t base your rebuilding costs on the price you paid for your home. For an estimate of the amount of insurance you need, contact your insurance agent. They will have tools available to provide you with an estimate to make sure your home is properly insured.
Your personal possessions
To determine if you have enough coverage, you need to conduct a home inventory. This is a detailed list of everything you own and information related to the cost to replace these items if they were stolen or destroyed by a disaster. For free online home inventory software, visit www.KnowYourStuff.org
Additional living expenses
This coverage pays the additional costs of temporarily living away from your home if you can’t live in it due to a fire, severe storm, or other insured disasters. It’s an essential feature of a standard homeowner’s insurance policy. It covers hotel bills, restaurant meals, and other living expenses incurred while your home is being repaired or rebuilt.
Liability to others
This part of your policy covers you against lawsuits for bodily injury or property damage that you or family members cause to other people. It also pays for injuries to others caused by pets. It pays for both legal defense costs and any damages a court rules you must pay.