No one questions the importance of obtaining home insurance. However, it’s the amount of coverage one should get that sparks debate. After all, the cost of insurance—while comparatively small compared to the losses you might face—is not something to regard lightly. If you buy too much, your premiums become a burden; if you buy too little, you leave yourself vulnerable to disasters.
So how do you decide how to choose the right amount? Take a look at these important factors:
Account for Present, Not Past Value
Many homeowners make the mistake of insuring their home in accordance to the purchase price. Why isn’t this enough? If you bought your home 10 years ago for $300,000, its valuation will certainly have increased, so that coverage amount will no longer reflect the current value of your home. If your home were ever to get razed to the ground, the cost of rebuilding it will certainly be higher because of inflation. Therefore, always insure your home based on its value and not its purchase price.
Insure Your Possessions Too
Here’s a shocking statistic sure to keep homeowners up at night: Around 2 million home burglaries are reported each year. But, don’t think criminals are the only threat to your personal possessions; floods, fires, hurricanes, and other disasters can also ruin your worldly belongings. The good news is that most home insurers will reimburse you for at least part of the value of the lost items, though you need to make sure that your coverage will be sufficient. Hence, take inventory of your home’s contents, then make sure that the insurance policy you get covers the combined price of all the valuables you own.
Don’t Forget About Personal Liability
If you were to slip and injure yourself at a grocery store, you may technically sue the establishment for damages. Unfortunately, the same rule applies to homeowners, too. That’s right: If your dog bites the mailman or if a delivery man slips on your driveway, you may very well be facing an expensive lawsuit. Any injury that occurs inside your property makes you legally liable, so double-check that your home insurance policy offers ample protection against costly litigation. This coverage should take care of both the court costs and any damages the court might order in favor of the plaintiff.
Indeed, having home insurance is simply not enough—you also need to make sure you’re sufficiently covered to avoid any headaches and heartbreaks. Of course, as your policy offers more protection, your premium also increases. Fortunately, you can work with trusted Atlanta home insurance brokers who can help you gain the best coverage at the best price.
How much homeowners insurance do I need?, III.org
How Much Homeowner Insurance Coverage Do I Need?, FreeAdvice.com