Choosing A Great Insurance Policy

How To Make Sure Your Home Has Enough Insurance Coverage

According to United Policyholders, approximately two-thirds of all American homeowners are underinsured, in terms of home insurance, and this is not a good place to be if you ever encounter a major disaster with your home. If you are worried that you might not have enough insurance coverage on your home, you should call an insurance agent to find out. Your agent may ask you some questions to determine how much coverage you need, and this will help you choose a policy that is sufficient. Here are several factors to consider when choosing the right coverage for your home.

The cost to rebuild it

The most important factor you should consider when choosing home insurance is the cost it would be to rebuild your house. If your entire house was destroyed by a fire or major storm, how much would you have to pay to have a contractor build you a brand-new house that is comparable to the house you have?

If you are not sure how much it would cost, you could ask a contractor to give you an estimate, or you could ask the approximate price it costs per square foot to build a house. Once you know this amount, make sure your structural coverage is at least this high, if not a little higher.

Additionally, make sure that your policy offers enough coverage for your belongings, which include everything you own inside your house. The amount of coverage you need for this should be at least 30% to 40% of the amount of coverage you have for your house. You should ask an agent, too, if you need to add endorsements or riders to your policy to cover things that your policy does not cover.

Consider getting extended replacement coverage insurance

The second thing you can do is purchase an extended replacement coverage home insurance policy. This type of policy guarantees to offer enough coverage to replace your home if the entire thing is destroyed, and it generally offers coverage up to 125% of your home's value. With this option, you cannot go wrong. If your house burns down and you have $200,000 of coverage, you would receive $250,000 to rebuild your house, instead of the amount of coverage you actually have.

If you want to feel safe and protected, you should make sure you have enough homeowners insurance coverage for your home. To learn more about coverage options, contact a home insurance agent today.


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