How Much Homeowners Insurance Do I Need?

People rarely know how much it would cost to rebuild their home and replace their belongings after a total loss. The prospect of determining local building costs and thoroughly cataloging all of their possessions can seem quite overwhelming. As a result, homeowners coverage has too often been based on assumptions: either a rough guess or a default percentage of the home’s structural value set by the insurance carrier. Protect yourself by playing an active role in determining the amount of insurance you need to cover your investment:

Here are some factors that may determine how much homeowners insurance you'll need:

The structure of your home. Get enough insurance to cover the cost of rebuilding your home at current construction costs. Don’t include the cost of the land and don’t base your rebuilding costs on the price you paid for your home. For an estimate of the amount of insurance you need, contact your insurance agent. Utilize these tools to obtain an estimate to make sure your home is properly insured.

Your personal possessions. To determine if you have adequate coverage, conduct a home inventory. This is a detailed list of everything you own along with the cost to replace these items if stolen or destroyed by a disaster such as a fire. For a list of home inventory apps, visit thebalance.com.

Additional living expenses. This coverage helps with expenses if your home is damaged and you need to live elsewhere during repairs. This important feature of a standard homeowners insurance policy pays the additional costs of temporary shelter if you can’t live in your home due to a fire, severe storm or other insured disaster. It covers hotel bills, restaurant meals and other living expenses incurred while your home is being repaired.

Liability to others. This part of your policy protects you against lawsuits for bodily injury or property damage that you or your family members cause to other people. It also pays for injuries to others caused by pets. It pays for both legal defense costs and any damages a court rules as your responsibility.

Mountain America Credit Union can help make sure you have the insurance coverage you need. Contact us today!