Owning a home can be a big investment, in terms of money, time, and memories. You should make sure that you have enough homeowners insurance to protect that investment. I always tell my clients that homeowners insurance isn't meant to pay off your mortgage if something happens to it, it should be there to rebuild your dream if something happens.
I use what is known as the Reconstruction Cost to calculate how much homeowners insurance you need. That coverage amount consists not only of how much it would cost to rebuild your home, but also includes some commonly overlooked things, like cost to demolish and remove debris, and possible changes in building codes and laws that could increase the cost to rebuild.
Most of the other coverage, like other structures, personal property, and loss of use coverage are a percentage of the reconstruction cost.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
A homeowner should purchase a policy that provides the highest possible liability limit. A lawsuit could ruin your future. The mortgage company and the insurance company will set the amount of coverage for the residence and most of the other limits are factors of that limit. I recommend that you consider earthquake and flood coverage as these are serious situations that aren’t covered by a Homeowner’s policy. An inventory of your household goods might indicate that you need increased limits in certain types of property. Water damage from backed up pipes and building ordinance are two issues that you should also consider.
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I use what is known as the Reconstruction Cost to calculate how much homeowners insurance you need. That coverage amount consists not only of how much it would cost to rebuild your home, but also includes some commonly overlooked things, like cost to demolish and remove debris, and possible changes in building codes and laws that could increase the cost to rebuild.
Most of the other coverage, like other structures, personal property, and loss of use coverage are a percentage of the reconstruction cost.