Do you have enough home insurance coverage?

How do you know you have enough home insurance coverage?

In order to determine whether or not you have enough home insurance, or are shopping for enough when you compare home insurance quotes, you must do some research.

• First, you must have a good idea of how much it would cost to rebuild your home in the event that it was completely destroyed by an insurable incident. Your insurance company and local builders should be able to give you estimates based on current codes and costs.
  
  
• Next, you must find out the cost of buying a comparable home in a comparable neighborhood. In case you do not want to rebuild or can’t, your insurance claim must cover this expense.
  
  
• Finally, you should attempt to determine the replacement value of all the items in your home. If your insurance company reimburses only fair market value then you could be on the short end of the stick since you won’t get as much through fair market value as you would for replacement value.

Remember, saving money on insurance rates is important, but investing money in a home insurance policy that cannot make you whole after an insurable event can be like giving your family an empty promise of security.

Home Insurance tips: This tip was originally posted on 10-22-2010 at 10:30 am.

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