You know you need homeowners insurance to protect your home – but countless options can seem overwhelming. In addition to figuring out what type of homeowners coverage you’ll need, it’s also crucial to figure out how much home insurance you’ll need to adequately protect your property. It’s important to set realistic policy limits based on your specific home, property and belongings. Here are some questions to ask yourself in order to accurately estimate how much home insurance is right for you.
1. What would be the total cost to rebuild my home?
Insurance is designed to help you plan for the worst. In the unfortunate event that your home has to be completely rebuilt due to a covered accident, a home insurance policy would ideally cover the entire cost (minus your deductible). Rather than simply insuring your home for how much you paid for it, you should consider the cost of rebuilding, market fluctuations in your area and your home’s age when estimating the rebuild cost. It’s also important to factor in the value of any new features or remodeling you’ve completed while living in your home. You can even work with a contractor to get a more accurate figure.
2. What is the total value of my personal belongings?
One of the most important features of home insurance is that it can protect your belongings in the event of a fire, wind damage or other covered accidents. To ensure that your policy limits can cover everything in your house, take an inventory of all of your home’s contents, room by room. Beyond approximating the cost of valuables such as electronics and art, you should also remember to include furniture, clothing, appliances and home goods in your estimate.
3. What would be the cost to live elsewhere temporarily in the event my home has to be rebuilt or repaired?
In the event that you and your family are unable to live in your home in the aftermath of a covered accident, how much would it cost you to live in a hotel or other temporary housing? Beyond the per-night cost, there are other day-to-day costs that you would incur if you were temporarily displaced, such as increased transportation costs, food costs and more. Your insurance agent will be able to calculate an amount based on your specific home and property.
4. How much could someone sue me for in a personal liability dispute?
Home insurance does more than protect your home and your belongings. The right policy can also protect you from paying out of pocket if you are found responsible for a guest’s bodily injuries. If the costs associated with their injuries exceed your policy limit, they could take legal action against you. Although choosing a personal liability limit isn’t as cut and dry as estimating other costs, think about your long-term finances and net worth when estimating how much personal liability protection you will need. Choosing how much homeowners coverage you’ll need is a big decision. Once you have an estimate, you can start your homeowners insurance quote from Nationwide. Our policies are customizable to your unique needs.