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How much should I cover my home for?

It is difficult to decide just how much insurance you need to have on your home to keep your family

financially protected. But the actual process of selecting appropriate figure is much simpler than you

might think if you break the idea of insurance down and apply its real purpose to your individual


Examining the Objective of Homeowners Insurance

Most of the time, the aim of the homeowner is to make sure that they have adequate insurance coverage

to be reimbursed should their home be completely totalled during an insurable event. Being made whole

is always chosen to being given half the value of your home-which would mean that you must either

supplement your insurance benefit in order to return to your lifestyle or that you must reduce your cost of


In addition to covering the value of your home it's likely that you want to insure the value of your contents

as well so that you are not made to cash out retirement and other savings in order to purchase furniture,

clothing and other needs.

Lastly, covering antiques, artwork and other valuables protects your interest in these pieces. While a

emotional bond to your belongings can never be fully replaced, the monetary worth of the item and the

money you've put into it, can.

What Goes Into Being Made "Whole"

You might think that being made whole by your insurance carrier means that you will get the sale value of

our home so you can fix up or purchase another, similar home. But there are actually many other

determinants involved in being made whole including:

Debris elimination: If the insurable event left debris around your home, this must be removed before

reconstruction can start. This is an extra expense that might exceed the value of your home but is

important to begin the process that will make you complete.

Following building codes: Over the years, as building materials change, the required codes for building

are updated too. The original windows that might once have been adequate may not be wind resistant

enough for your local building codes, so rebuilding your home may incur many costs that surpass the true

value of your former dwelling.

Catastrophe awareness: If a natural disaster is the result of your insurable event, then it's unlikely that

yours is the only home affected. That means that construction firms will be overwhelmed and may

increase prices to keep up with demand. These inflated costs may even exceed the limits on your policy.

When calculating the replacement cost of your home, you will want to keep this in mind.

Figuring Out the Right Amount for you

All of this information may do nothing more than make you concerned that you don't have enough home

insurance coverage. But being intimidated may lead to inaction, which is the worst step you can take.

Alternatively, develop a plan of action for calculating a reasonable amount of home insurance for your


1. Begin by getting a real estate appraisal. While this might be costly, it can give you a accurate idea

of the value of your home and the limits you should select.

2. Work with your agent: Your insurance agent can give you an estimate of the insurance

company's replacement cost for your home. A program by Marshall & Swift instantly measures data

including location and building costs and determines your likely replacement costs. This data could

change annually so it's important to ask your agent for updates when you renew your policy.

Content under license to Gerelli Insurance Agency, Inc., © Copyright 2017 Insurance Technologies Corporation

3. Survey homebuilders: No one knows current prices for home building quite like those companies

that are actually doing it. Call a local home builder and tell them that you want a valuation so you can get

suitable insurance coverage. They may charge for the estimates.

Remember, protecting your family's largest and most important investment is your main concern when

buying insurance. While you may be satisfying the requirements of a lender by taking out a policy, that

should not be your only reason for doing so. Ensure that you and your family will have some financial

recourse should you encounter an insurable event should be your highest priority.

Contact us at 845-265-2220.

Posted 3:32 PM

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