When it comes to home insurance, things can get confusing. Do you need to carry every type of coverage? How much is enough? Am I paying too much? While there’s no “one-size-fits-all” plan for home insurance, you’ll want to carry enough insurance to rebuild, repair, or replace things in your home should a disaster occur.

Coverage For Your Home’s Structure

Standard homeowner insurance policies provide coverage for things such as fire, flood, hail, or other catastrophic damages. If you live in an area likely to flood or earthquake, you’ll want to look into additional disaster coverage. No matter the size or cost of your home, you’ll want to have a large enough insurance policy to cover the cost of a rebuild, should disaster occur.

When purchasing an insurance policy, make sure you have enough structural coverage to rebuild your home. Pay attention to the current market value of your home when choosing an insurance policy, it could have increased or decreased since you purchased your home. When factoring in rebuilding costs, familiarize yourself with your home’s square footage and market value, and get to know the cost of local construction in the area – some areas with higher cost of living can come with considerably higher rebuild costs. For a quick estimate of the insurance you need, multiply the total square footage of your home, per square foot building costs.

Coverage for Personal Posessions

Most home insurance policies will provide coverage for your belongings, however the standard amount may or may not be enough. Take inventory of your personal possessions. In order to accurately assess the value of your possessions, an list of inventory will make things much easier. Keep in mind cash value vs replacement costs when valuing your items. If you think you need more coverage, get in touch with your insurance provider and ask about increasing limits for personal belongings.

Don’t Cut Costs by Cutting Coverage

One of the biggest mistakes you can make when selecting a home insurance policy is to remove certain coverage you need in order to save money. Do not leave things up to chance when it comes to your home and your possessions.

Often times, people will overlook necessary coverage in order to keep their policy “within budget.” If you live in an area where disaster is more likely to occur, carry the insurance coverage to go along with it! Make sure your home’s major systems are covered, as well as necessary things like sump pumps, or other preventative systems. Finally, know what you’re paying for. No one wants to be surprised in the middle of a crisis when they’re trying to file a claim.