Your homeowners insurance quote policy needs depend upon your personal situation. Generally, you
should insure your home for 100% of its value (including its
contents) with a replacement cost policy. Then, if your house
costs $100,000 to rebuild from the ground up, that's what your
insurance company would pay in the event of a total loss. Likewise,
if shingles are blown off the roof or cabinets are damaged
by fire, no depreciation would be deducted even if the damaged
property is used and worn.
If you are insured for actual cash value, you will pay less
for your policy, but you may not receive enough money to replace
your damaged property. Instead, you will receive the amount
your property is worth at the time of the loss - its cost
minus depreciation for age and normal wear and tear. Some
forms of property, such as fences, awnings, and swimming pools,
are usually settled at cash value, in addition to personal property
such as appliances, furniture and clothing, unless you specifically
purchase replacement cost insurance.
Ask yourself the following questions to decide how much
homeowners insurance you may need:
- How much will it cost to replace my home today?
Ask an appraiser, builder, or your insurance agent for an
estimate. If you make drastic improvements to your home,
such as remodeling or building a deck, you should update
your appraisal and coverage to compensate for the increased
- Am I protected for inflation? Many homeowners companies
automatically adjust your coverages upward to cover the
rising cost of replacement, but you should review your
policy once a year to see if you still have adequate coverage.
- Am I planning any additions or renovations?Adding
a family room or renovating a basement will increase the
value of your home and the amount of coverage needed.
- Is the value of my personal property fully covered?
If you have many valuable possessions or have recently acquired
new belongings such as stereos, televisions, computers,
cameras, and musical instruments, you may need to pay for
increased coverage. Ask your homeowners insurance agent if you are
covered for specific items of value. If not, consider purchasing
extended coverage to protect jewelry, furs, silver, and the
- Do I need any optional coverage? Some losses
are specifically excluded in all homeowners insurance quotes policies, such as those
resulting from floods and earthquakes. If these are a danger
in your area, you may want to obtain additional or separate
- Do I have an inventory of my personal belongings?Complete
the room-by-room inventory, listing
the approximate value of your possessions. Keep the completed
list in a safe place outside your home, such as in a safe-deposit
box or at your office. Photograph or videotape each room,
if possible, and keep this visual record with your inventory.
What If I Live in an Apartment or Condominium?
If you own a condominium, the condominium association may
pay for the insurance protection on your building, as well
as liability protection if anyone is injured in common areas.
You may need to buy your own liability insurance. Read your
association's policy carefully to determine if you are adequately
covered, then purchase additional protection if necessary.
If you rent an apartment or house, the owner's property and
liability are covered by his or her insurance, but your property
and liability exposure are not. You may be held liable, as
well, for damages to the owner's property done by you. You
can purchase homeowners insurance quotes policy for your personal possessions as well
as liability protection under a renter's policy.
What If I Rent Property to Others?
You should have a separate homeowners insurance quotes policy for dwellings you rent
to others. Insurance will protect the property itself as well
as any of your personal belongings at that residence. You
also need business liability and medical coverage for anyone
who might get hurt on your property because of something on
your property or as a result of your action. Ask your homeowners insurance
agent for details on these coverages.