4 Common Questions About Homeowners Insurance
From our partners at Leavitt Group
You buy homeowners insurance to protect one of your biggest assets, so it’s important to purchase enough coverage to suit your needs. By looking at a few key factors, you could end up saving yourself a lot of money and heartache should you ever have to make a major homeowners insurance claim.
We asked our insurance experts to answer some of the most common questions about home insurance. See their best advice below.
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What is replacement cost and how is it calculated?
Replacement cost is how much it would cost to rebuild your home if it is damaged or destroyed. The cost to rebuild can often be very different from market value due to the value of the land and the current state of the housing market. Since your insurance is covering the cost to rebuild the structure, sometimes that cost is more and sometimes less than market value. It’s important to go over the details of the home with your insurance agent and make sure your coverage is adequate.
Learn more about home replacement cost in these articles:
Homeowners Insurance: Extended and Guaranteed Replacement Coverage
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How much will it cost to replace my personal possessions?
People often underestimate the amount of ‘stuff’ they have. When you consider all your clothes, furniture, appliances, toys, electronics, etc., it can add up pretty quickly. In general, the amount of personal property coverage is tied to the total homeowners coverage you have. You can customize the amount of coverage based on the value of your personal possessions. The best way to determine the amount of coverage needed is to create a home inventory and estimate the value of your belongings.
Learn more about creating a home inventory in these articles:
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What is coverage for additional living expenses, and do I need it?
A sizable loss can often impact your ability to live in your home while repairs are being made. Luckily, most homeowners insurance policies have coverage for additional living expenses built into the policy. This will pay for extra travel costs, extra food costs and hotel/accommodations that you otherwise would have to pay out of pocket if you were not covered.
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How much coverage do I need in the event I am named in a lawsuit for bodily injury or property damage caused to others?
A lawsuit falls into the category of Coverage E—Personal Liability. At our agency, we write homeowners policies with a limit of at least $300,000, though more often we will write for $500,000. Depending on your situation, it may also be beneficial to purchase an umbrella policy which increases your limits of liability by $1 million or more.
Talk with a Mountain America Insurance representative to ensure you have the right homeowners insurance coverage for your needs.
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