Home Insurance Considerations

When it comes time to review or purchase a new home insurance policy, there are several factors to consider. First, you should review your home insurance policy annually to make sure it meets your needs and investment in your home.  

One particular area a homeowner should pay attention to is construction costs. While you may think your policy is enough should your home incur damages, it may not account for a rise in construction costs.

 To research these costs, have your home appraised. Appraisals take three aspects of your home into consideration: replacement costs, market value and actual cash value. Another option is calling local contractors to determine the average cost per square footage of construction in your area. By knowing the cost per square foot, you can multiply it by the size of your home to determine your total replacement costs.

Also, when reviewing your policy, adjust coverage each time you spend 5 percent of the home’s total value on a remodel or addition.

Your insurance should cover more than your home in general. Your policy should also include protection for the contents, or valuables, inside your home. While most insurance policies will account only for these items’ cash value, another option is endorsements. An endorsement provides replacement cost coverage on items such as expensive glassware, jewelry, china and other valuables.

Another aspect of homeowners’ insurance is liability coverage. What if you have a party, and a guest at your home takes a misstep, causing them or others harm? The average claim for liability insurance has increased over the previous few years to an average of over $15,000. Plus, liability coverage is an inexpensive addition to your current policy.

Be careful when reviewing and adding expenses to your current policy. It’s easy to get caught up in the moment and add things you don’t need. Make sure your policy fits you and your home.



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