You never know when and if something will happen – whether it’s a big catastrophe or something less destructive. So be prepared! It’s essential to choose the right coverage, the right company, and the right price for your specific situation.
Keep in mind, homeowners insurance is really a collection of different kinds of coverage such as fire, theft, liability and windstorm wrapped up into a single policy. Whether you’re a current homeowner who may need to upgrade your coverage or a potential buyer who is purchasing home insurance for the first time, review these steps so you have the right coverage for YOU:
How do you determine coverage?
Your coverage should be based on the square footage of your home, but it must also factor in how much it will cost per square foot to rebuild in case of disaster. The cost to rebuild varies by area and California is one of the highest in the nation, while Fresno County has a lower cost to rebuild within the state.
Your insurance company will most likely require you to purchase coverage that insures 80% of the replacement value of the home. Be sure to take into consideration everything that you have inside the home, which will also need to be replaced in the event of disaster.
Do you have enough coverage?
Get current information about what your home is worth today (replacement value), and how much it would cost to rebuild it. Insurance companies look at these values differently from the market value, even if they end up being close to the market value of your home. It’s crucial to have the right amount of coverage in case of an unfortunate event. You don’t want to find out that your policy doesn’t cover the cost of repair AFTER the fact!
Make sure that your deductible is set at a price that you can afford in the event that you must rebuild or do extensive repairs to your home. If you’ve got a special art collection or a home office with equipment and supplies, you should be sure to let your agent know so that they can help you determine how to get those personal items covered as well.
What about flood insurance?
Depending on your location, flood insurance might be required. However, if you live on a large acreage property, parts of the property can have higher risks of flood whereas parts of the property (hopefully your house pad) have lowest risk of flood.
Note, being covered for a water damage from a flood in your home is different from having flood insurance. Talk to your insurance agent about the difference and make sure you’re covered for both scenarios.
Do you need to upgrade?
For current homeowners, set up a time to meet with your insurance agent to discuss what coverage you have now and whether you need to increase it. Also let them know about any new home improvements or any new possessions that should be included in your policy.
Remember, you only need this if something terrible were to happen to your home and your expensive personal items that are covered by your policy. It is not meant to cover expenses like a light fixture needing replacement (unless it’s stated in the policy).
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