Your home is one of the largest investments you'll ever make in your life.
When it comes to buying homeowners insurance it is important to look beyond the price tag. Often, you will find the less costly policies have many exclusions, low coverage limits and high deductibles. Every home comes with its own set of risks and exposures. It is imperative that you understand your own.
There are two main pieces of that make up a Homeowners insurance policy. The physical protection, which includes the house, garage, and your personal property (or stuff) inside. Then there is the liability portion. This is often overlooked, but most likely to protect you from a catastrophic financial setback.
A helpful insurance agent will guide you through the process of understanding your limits and finding coverages that best suit your needs. There is a process for calculating the replacement cost of a home. This will enable an insurance company to rebuild your home after a loss. These numbers will look different for each individual as they take into account the age of the house, location and cost of materials, customization, finished spaces, and more.
Personal Property Replacement Cost
- Another very valuable protection is “Personal Property Replacement Cost”. This endorsement modifies your policy to change your personal property coverage from “Actual Cash Value” –what it is worth today including depreciation, to “Replacement Cost” – what it would cost if you purchased it new, today.
- There are some personal property items that are not automatically included or have specified limitations within a home policy. The policy contract can be modified to accommodate these restrictions or expand protection as needed. The few items commonly found on this list are recreational vehicles, snowmobiles, jewelry, collectibles and boats. It is important to speak with your agent to determine what is included and what you may wish to add.
- The second coverage within your homeowner’s policy is Personal Liability. This coverage pays for a judgement against you if you are found legally liable for situations such as a dog bite, someone slipping on your sidewalk or inside your home, and also unintentional acts. This protection goes with you, wherever you might be. If you injure someone on a golf course or a softball field, your personal liability will be there to defend you.
*We recommend a regular review of your policy coverage.