It can be hard to figure out what kind of Homeowners insurance coverage you need, especially if you are a first-time homeowner or have never really looked at your policy. One of the most important things to remember when figuring out what kind and how much Homeowners insurance you need is to figure this out before you talk to an insurance agent.
A smooth-talking agent on the phone can easily convince you to buy extra insurance that you will never need. This doesn't mean you shouldn't listen to an insurance agent's advice at all, but before you start, you should have a good idea of the type and amount of coverage you need and want.
One of the first things an insurance agent will want to know is how much the house is worth. This just means the value of the home's exterior and interior as they are when you buy it, without any furniture. Remember that an insurance agent should ask specific questions about the outside of the house, such as whether it is brick, vinyl siding, wood, or a mix of these, as well as questions about a porch, deck, or sunroom.
Insurance agents should also ask specific questions about the house's basic appliances. They will want to know how old the plumbing and electric system, the air conditioning and heating unit, the appliances, and even the countertops and floors are, especially if they are made of expensive materials like granite or marble.
Keep in mind that even though you bought the house for a certain amount, say $100,000, the Homeowners insurance company may want to set payments for the structure of the house to be anywhere from $10,000 to $40,000 more than the current appraisal and market value of the house to account for inflation. You can decide if you want to agree to these terms, but keep in mind that the cost of fixing these things in the home will go up over time, and you don't want to end up with not enough money from the insurance company to fully replace your home at any time.
If you just bought a home that will soon be remodelled or rebuilt, you may want to add a lot to this part of the insurance coverage. That way, if anything goes wrong during the remodelling process or after the remodelling is done, the total cost of remodelling will be covered without a problem. You can always wait until the remodelling is done to call and get a new price quote, but it is best to set up the insurance before the remodelling is done.
The value of the things inside the home is the second most important thing to think about when figuring out how much Homeowners coverage you need. Some people find this hard to do because they haven't kept good records of what they've bought, which makes it easy for insurance agents to recommend more coverage than is needed for things like furniture.
Before calling for price quotes, it's best to sit down and make a list of the big purchases you've made for your home, like furniture, big appliances, and electronics. Many basic interior coverage plans don't cover electronics like computers or laptops, so if you have one of these in your home, make sure to ask about coverage. Also, some insurance policies cover jewellery, while others require a separate "special" interior Homeowners policy. However, most jewellery owners would only have to pay between $30 and $80 a year to add this to their policy.
Location should be the last thing to decide how much coverage is needed. It is very important to think about whether you need hurricane insurance, flood insurance, wind and hail damage insurance, or even tornado insurance.
Even if you live in a hurricane zone, you may need to buy separate flood or wind insurance in case your home floods or the windows blow out. The same is true for insurance against tornadoes or earthquakes. You may need to add extra things to your policy to cover wind damage or even flooding.
