Home Owner"s Insurance - What Is Enough?
Your home is surely one of your most important possessions.
Therefore you insure it to ensure you don't become a painful object lesson to others.
But the question is, how much home owners insurance is enough? I'll help you in this decision and also help you pay less for better coverage.
To know how much home owner's insurance coverage is enough for you, you have to know what your home is really worth.
If you want to extend what you call home to all your valuables at home, you also need to take an inventory of them all.
In deciding what your home is worth subtract the cost of the land.
This is because in the event of most perils that could destroy your house, the land is intact.
And since the market price of your house includes the land, you'll be buying too much insurance if you use the market price.
It's the structure and not the land that needs insurance.
Let's say you discover that the value of your house (structure alone) is $230,000.
This is what it would cost if you were to rebuild it today.
An HO-3 (Homeowners-3) insurance policy of $230,000 and not more is what you need for and not a cent more or less (I've used the HO-3 policy as it's the most popular.
There are other forms too).
Although an HO-3 policy covers your property and most of its content, you may need more if...
1) You have items that are far more expensive than the limit provided.
For example, if you have expensive jewelry, paintings and such, the limit of this policy may not be able to replace them if you make a claim.
Ask to know how much your valuables are covered to help you know if you need more coverage.
2) You live in an area that is prone to floods or other disasters that are excluded in your homeowners insurance policy.
3) If you have special trees or shrubs that you want coverage for.
They are not usually covered under this policy unless they are lost to fire, theft or vandalism.
4) If there's anything you want covered around your home that your policy doesn't provide coverage for.
Now that we have an idea of how to ensure we get adequate coverage, how do we ensure we get it at the best price possible? This one is really very simple.
Visit around three reputable insurance quotes sites and get homeowners insurance quotes (Getting quotes is not equivalent to buying insurance.
It's shopping for the best price).
Pick the best price to value ratio from all the quotes returned and then apply.
Take your time to ensure you understand the details of your homeowners policy.
Also make sure you're satisfied with it before signing and paying.
Therefore you insure it to ensure you don't become a painful object lesson to others.
But the question is, how much home owners insurance is enough? I'll help you in this decision and also help you pay less for better coverage.
To know how much home owner's insurance coverage is enough for you, you have to know what your home is really worth.
If you want to extend what you call home to all your valuables at home, you also need to take an inventory of them all.
In deciding what your home is worth subtract the cost of the land.
This is because in the event of most perils that could destroy your house, the land is intact.
And since the market price of your house includes the land, you'll be buying too much insurance if you use the market price.
It's the structure and not the land that needs insurance.
Let's say you discover that the value of your house (structure alone) is $230,000.
This is what it would cost if you were to rebuild it today.
An HO-3 (Homeowners-3) insurance policy of $230,000 and not more is what you need for and not a cent more or less (I've used the HO-3 policy as it's the most popular.
There are other forms too).
Although an HO-3 policy covers your property and most of its content, you may need more if...
1) You have items that are far more expensive than the limit provided.
For example, if you have expensive jewelry, paintings and such, the limit of this policy may not be able to replace them if you make a claim.
Ask to know how much your valuables are covered to help you know if you need more coverage.
2) You live in an area that is prone to floods or other disasters that are excluded in your homeowners insurance policy.
3) If you have special trees or shrubs that you want coverage for.
They are not usually covered under this policy unless they are lost to fire, theft or vandalism.
4) If there's anything you want covered around your home that your policy doesn't provide coverage for.
Now that we have an idea of how to ensure we get adequate coverage, how do we ensure we get it at the best price possible? This one is really very simple.
Visit around three reputable insurance quotes sites and get homeowners insurance quotes (Getting quotes is not equivalent to buying insurance.
It's shopping for the best price).
Pick the best price to value ratio from all the quotes returned and then apply.
Take your time to ensure you understand the details of your homeowners policy.
Also make sure you're satisfied with it before signing and paying.
Source...