When purchasing a home, obtaining insurance on the property is often crucial to ensure that accidents or damage is covered. When shopping around for coverage, it’s important to determine how much insurance you’ll need for the residential property. Here are a few tips to follow to determine the amount of home insurance that is needed.
Take Inventory of Your Possessions
From appliances to jewelry pieces, there are many different items in the home that can have a high value and need to be accounted for when obtaining a homeowner’s insurance policy. Take a detailed inventory of all of the items that you own in each room of the home to ensure that you can have it replaced if theft or a fire occurs. Most coverage for homes is 40 to 75 percent of the property value.
Use a Home Insurance Calculator
Take advantage of a home insurance calculator to determine how much coverage may be necessary for your home. Through the home insurance calculator tool, you can have a better idea of how much insurance you will need to ensure that most of your home is covered if anything unexpected was to ever occur.
The insurance policy should be enough money to completely rebuild your home and should include the cost of adding flooring, fixtures, and countertops throughout your home. Homes that are in flood zones while need additional required coverage.
Understand Your Assets and Liability
Choose more than the minimum amount of liability protection to ensure that you don’t have to pay out of pocket if there were an accident to occur on your property. You can also consider obtaining umbrella insurance to ensure that your assets are protected when you exceed the limits of your primary policies.
Consider Additional Living Expenses
The cost of additional living expenses also needs to be considered when shopping for a homeowner’s insurance policy. If you work out of your home, consider buying business insurance to cover valuable items that pertain to your business. If you rent out your home you can be reimbursed with certain policies and have a loss of income if the property is damaged and needs to be rebuilt.
Overall, the majority amount of home insurance you will need is up to you. Use the tools available to you and look to other people to get other opinions on your policy.