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.
How much would it cost to rebuild the structure of your home?
Having homeowners insurance helps cover costs from damage due to things like fire, lightning, hail, windstorms — among other perils. 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, 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 more expensive 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 of this coverage you’ll need to rebuild your home.
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 inventory of your belongings will not only help you figure out how much coverage you need for your personal possessions, but it’s a great record of all the things you own. And, trust us, in the event valuables are stolen or damaged by a covered loss, your inventory will make filing a claim much easier.
Keep in mind, there are limits to the personal property coverage offered with your base policy — make sure you ask about those limits 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. Things like jewelry, collectibles, furs, or other valuables may need additional coverage.
What would it cost for expenses if you’re unable to live in your home?
If your home was uninhabitable after damage from a storm, fire or other covered instances, would you be able to cover the cost for temporary living arrangements? It’s important to consider costs of hotel bills, food and other living expenses you may incur while your home is being rebuilt. A basic level of coverage for this situation is automatically provided on all homeowners and renters policies, and additional increased limits are available if desired.
How much liability insurance do you need?
The liability portion of your homeowners insurance doesn’t protect your things — 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 to other people. This coverage may cover court costs and damages awarded, up to your policy limits.
So how much liability coverage do you need? The no nonsense answer is as much as you reasonably can afford. For reference, many homeowners policies have a minimum of $100,000 worth of liability insurance, but it may be in your best interest to purchase a higher amount, like $300,000 to $500,000. And, 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 accidently injured in your home.
It’s important to educate yourself on your homeowners coverage so you can better understand how you’re being protected. Your American Family Insurance agent is your best advocate to ensure you’re properly covered from the unexpected.