You need to get at least as much coverage as the insurance carrier says is required to rebuild your home. Insurance carriers will provide a calculation of how much it should cost to rebuild the home in a certain area. If you go below that amount then there could be penalties in how much the insurance company will pay out.
On a related note, you should obtain a guaranteed replacement cost increase. This guarantees that you will get an extra amount of coverage (usually a percentage of your current coverage) to rebuild your home in the case of a catastrophic loss. This way, if you want to rebuild on a nice piece of land, you will not be stuck fronting more money in order to get back to where you were.
In summary, never low ball your coverage to save money because you will end up paying out-of-pocket to get back to the status quo.
Agency Owner, The Thomas G Sheehan Agency, 27 Glen Road Sandy Hook, CT 06482
Most insurance providers these days will begin there service for you by doing an on site inspection of your home. In addition to identifying any issues that could possibly cause a loss in the future, we complete a Reconstruction Cost Analysis to determine what it might cost to repair or replace your home in the event of a loss. Once that number is determined, a reasonable recommendation can be made that will reflect current reconstruction costs in your area.
Your insurance professional will also suggest either full replacement value or extended replacement as an option, which ever the company represented may offer.
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On a related note, you should obtain a guaranteed replacement cost increase. This guarantees that you will get an extra amount of coverage (usually a percentage of your current coverage) to rebuild your home in the case of a catastrophic loss. This way, if you want to rebuild on a nice piece of land, you will not be stuck fronting more money in order to get back to where you were.
In summary, never low ball your coverage to save money because you will end up paying out-of-pocket to get back to the status quo.
Your insurance professional will also suggest either full replacement value or extended replacement as an option, which ever the company represented may offer.