How Much Insurance is Enough?

The cost to rebuild your home is its replacement cost. This can be very different from the estimated market value or actual purchase price. It is therefore very important to try and determine what coverage for a dwelling should be.

Deciding How Much Insurance is Enough

We will work with you to estimate the replacement cost for your home and adjust your policy limits from time to time to reflect changes.

It is critical that you provide us with accurate, updated information about your home and contents. If your dwelling limit accurately reflects your home true replacement cost, some companies will pay more than the limit if a covered loss is greater than the limit on your policy. Ask us if Full Value Replacement Cost is available for your situation.

Once a review of your home and possessions indicates you are properly insured, it's a good idea to examine your coverages and limits from time to time, especially whenever you make improvements or additions.

Be Sure You Have Enough Insurance

Here are some steps you can take to reduce the danger of being seriously underinsured:

  • Call us. If you have questions or concerns about the limits in your policy, ask us to review the amounts with you.

  • Read your policy. Certain property, such as jewelry, furs and fine arts are better insured separately. Knowing what is covered and for how much will help us insure you properly. If there is anything in your policy you don't understand, contact your agent and ask for an explanation.

  • At each annual renewal of your policy, you receive a new Policy Declarations page showing limits of coverage, optional coverages and endorsements. Review this information. If you do any significant remodeling or add a family room, extra bedroom or bathroom, etc., tell us about these changes so your coverage limits can reflect these improvements.

  • Consider carefully whether your policy provides all the protection you need. Does it provide coverage for extra costs resulting from building code changes? Does it automatically increase coverage limits annually to keep pace with inflation? Does it provide additional funds if the cost of rebuilding your home exceeds the policy limits? Find out whether your insurance company will stand behind agreed upon repairs after a claim.

  • Does your policy include replacement cost coverage for your personal property? If not, you can add it by endorsement. The cost is small, the protection valuable. Replacement Cost Coverage pays losses to your possessions at the cost of brand new items. Without this option, a covered loss to your personal possessions would be depreciated by air and condition, reducing the amount you would be paid for the claim settlement.

  • Consider whether you should have a greater Limit of Liability for coverage for personal property than your policy provides. Personal property coverage is usually 70 percent of the coverage limit for the structure. (Example: Dwelling limit is $300,000, your personal property limit is $210,000.) If you need more than this, it is available for a small additional premium.

  • Prepare an inventory of personal property items, update it periodically, and keep it in a safe place outside your home, such as a safe deposit box at your bank. It will save you hours of time trying to list everything damaged or destroyed if you need to make a claim. Even video taping each room with descriptive information on the sound track can assist you in this process. Be sure the date stamp is on the videotape and open drawers and closets doors.

To obtain a free, no-obligation quote for your home and personal belongings, please submit the form and we will contact you.