Recommended Home Insurance Coverage

Every homeowner has unique home insurance coverage needs. These needs are based on numerous factors, such as the replacement cost of your personal belongings. Although it is your insurance agent's job to help you select the right policy, it's best to have an understanding of what's generally recommended for home insurance coverage.

Personal Items

Individual needs vary when it comes to how much personal property needs to be protected. Specifically, this means that you will need to list all your most valuable possessions and their associated replacement costs, and submit that to your insurance carrier. This coverage is usually called “scheduled personal property”. It will also cover any items in your car that are lost in case of auto theft or the destruction of your vehicle. Auto insurance won't cover belongings inside a car.

Liability Coverage

Liability coverage is designed to help protect you from being sued in the event that someone should hurt themselves while on your property. For example, if a person should fall on your sidewalk or driveway and decides to sue, your homeowners insurance's liability coverage can help to protect you. An umbrella policy is an additional type of liability insurance that can help to protect you from liability in the case of a legal judgement regarding slander, defamation and libel.

Loss of Use Coverage

Many homeowners overlook the cost of moving out of their house and living elsewhere in the event that their house is seriously damaged. A loss of use endorsement is recommended as a means of preparing for this likelihood.

Other Structures

An "other structures" endorsement is a type of coverage that is meant to protect additional structures on your property. This may include a storage shed or unattached garage that you want insured. 

Appropriate Coverage Levels

You should always check your policy to make sure that it covers the reconstruction costs for rebuilding your home. This is not the same as the value of the house as decided by an appraiser. Sometimes the cost to rebuild a house may exceed its actual value. It may also increase over time, and moreover there may be changes added by the Government to building codes. Recommended coverage limits for replacement costs should be set to 125 percent of the cost to rebuild your home. In addition you should add coverage to handle changes to building codes, which is separate from replacement cost coverage. You may also want to consider inflation coverage, if your insurance carrier has it.