How To Calculate Your Home Insurance Needs
If you’re faced with the unexpected, you’ll be glad you’re equipped with the right insurance protection.
Consider the following to determine the coverage amount you’ll need to protect your home and assets.
Consider Your Zip Code
Simply providing your zip code can offer a lot of information about the potential cost of your home insurance. Your location helps insurance companies gather information about things like the average value of homes in your area, building costs, as well as how many claims are placed in that zip code — each of which helps them better determine the cost of your home insurance.
Determine How Much It Would Cost to Rebuild Your Home
Having homeowners insurance helps cover costs from damage due to things like fire, lightning, hail, windstorms — among other events. And if you live in an area that has a high risk of flooding or earthquakes, you’ll want to make sure you have insurance for those, too.
Basically, to estimate how much homeowners insurance you need, consider the cost to rebuild your home. A number of factors will impact the cost to rebuild: Things like the style of your home (e.g. ranch, colonial), type of materials used to build the structure (e.g. brick, stone, frame), type of roof, and other special features of the home (e.g. fireplaces, exterior trim) can all impact the cost to rebuild your home — which may make it different than the original price you paid, the fair market price or the home’s assessed value. Connect with your insurance agent — they’ll help you calculate how much coverage you’ll need to rebuild your home.
Estimate Your Total Property Replacement Value
How much would it cost to help replace your belongings? All of the things inside your home are what make it uniquely yours. And when you start to add up your possessions, from your pots and pans to your closet full of clothes, it probably amounts to quite a bit.
Taking a detailed home inventory of your belongings will not only help you estimate how much property insurance coverage you need for your
personal possessions, but it’s a great record of all the things you own.
Keep in mind, there are limits to the personal property coverage offered with your base policy — make sure you ask about those limits and add them to your property insurance estimate so you’re sufficiently covered. Knowing your limits will help you understand if you need to itemize certain valuables and ask for increased special limits.
Decide How Much Liability Insurance You Need
The liability portion of your homeowners insurance doesn’t protect your stuff — instead it protects you against lawsuits brought against you for things like bodily injury or property damage that you, a family member or even a pet cause. This coverage may cover court costs and damages awarded, up to your policy limits. If you’re looking for even more protection for your home, you can check out our umbrella liability insurance to safeguard your hard-earned dreams. Your agent can help you understand if you need more coverage based on the value of your property, savings and other investments.
Your liability insurance also includes medical payments coverage to pay expenses for those who are accidentally injured in your home.