Do You Have Enough Home Owners Insurance

Do You Have Enough Home Owners Insurance

Do you know if you have enough home owner’s insurance? With the exception of providing for the safety of your loved ones, there is nothing more important than protecting your home. Home owner’s insurance offers you protection by enabling you to insure your home in the case of natural disasters, fire, and burglaries. But how do you know if you have enough home owners insurance?

Most home owner’s insurance policies include two different types of insurance coverage: liability insurance and hazard insurance. Liability insurance covers costs that come from injuries sustained by persons while on your property. Hazard insurance covers loss and damage to your property and your personal possessions such as theft, natural disasters, lightening, and fire. However, some very common hazards such as flooding and earthquakes are often left out of regular hazard insurance policies.

The last thing that you want to have happen to you after your home sustains major damage is the added pain and stress of discovering that your home owner’s insurance is simply not enough to cover the costs to fix it. There are several factors that you’ll need in take into account in order to figure out if you have enough home owner’s insurance or if you need to upgrade your current policy.

Have you recently upgraded your home?

One big mistake that home owners often make is failing to upgrade their home owner’s insurance when they make upgrades to their homes. Expensive upgrades and improvements can add value to your home. But unless you cover that added value, you won’t be able to receive enough money from your home owner’s insurance to repair damages or rebuild your home back to its current state.

Do you live in a high-risk area?

If you live in a state in which a specific type of disaster-like hurricanes or earthquakes-- is more prevalent, then you will want to purchase extra hazard insurance coverage. You can usually either buy that extra coverage from your insurance company at an extra charge or from another insurance provider.

Is your personal property covered?

Your home owner’s insurance policy also covers your personal property, such as your appliances, clothes, and furniture. Certain more expensive items like jewelry or fine art might require additional coverage. If you have a lot of expensive personal belongings that it would cost a lot to replace, then you may want to purchase a supplemental premium to cover the full value of the belongings.

How much would a total rebuild cost?

The worst case scenario would be that your entire home gets destroyed. As low as the risk is of this happening in terms of odds, it has happened to plenty of homeowners. Typically its disasters like twisters and fire that cause total damage to a home. Check your current home owner’s insurance policy right now to see how much your replacement cost coverage is and what type you have.

There are two different types of replacement coverage-that which gives you the actual cash value of your home and guaranteed replacement coverage. With the first, you’ll get replacement cost minus depreciation. With the second, you will receive a total replacement.

If you are not absolutely certain that the amount in your current policy will be enough to completely replace your home in the event of its total destruction, and then it may be time to update your policy.