When in the market for a homeowners policy one of the first questions that come up is, “How much coverage do I need?” followed by several other questions the Homeowner may have. Below are a few of the more common discussions with homeowners policies.

How Much Homeowners Insurance Do I Need?

When getting a homeowners insurance quote what most Agents will do is use a cost estimator to figure out the replacement cost of the home. When they do this, it will ensure that the
home is properly covered. Now your homeowners insurance limits may be less than what you paid for on the home. Insurance companies don’t cover the land around it and why would they. If you have a smaller home on choice property, the insurance company is still only going to cover the cost of the home in the event of loss.

What is 125% Replacement Cost Coverage

When you get your homeowners policy you want your home covered in case the worst happens. So in the event the cost of construction increases at the time of loss, what happens if your initial limits don’t cover the entire cost of reconstruction? This is where 125% replacement cost coverage comes in. If you have your limits set at $200,000, in the case of inflation or higher costs of materials, the Insured would have another $50,000 on top of the dwelling limits to ensure there will be enough coverage at the time of loss.

Choosing Your Homeowners Insurance Deductible

When choosing a deductible I usually will go for $1,000. I recommend the insured go with either $500 or $1,000. If you do choose a lower deductible, this does not mean you should file a claim if the loss is under $1,000. It’s just not worth it. That claim goes on your reports and you may find yourself paying a significantly higher rate for the next 5 years. Now in the event a bad windstorm causes several thousand in damage, having the lower deductible will mean having in order to get the damage repaired. However, by choosing a higher deductible your rate will be lower.

If you need homeowners insurance please feel free to leave a comment with your name, property address and a phone number and Myself or a licensed independent Agent in your area will be in touch with you shortly.

We will also continue providing more information regarding the benefits of having a Homeowners or Renters policy here. Bookmark us to stay up to date on insurance tips and for your comparison shopping needs. Thanks