How Much Home Insurance Do I Need?

If you are a homeowner, you have or are ring purchasing a home owners insurance policy. But before you choose an insurer, you want to know how much is enough? Further, you want to know what your home owners insurance policy will truly cover. So when the time comes to choose your policy needs, these are a few factors which will help you decide how much is truly enough.

1. Disaster prone area -
Do you live in a high flood areas, a state where hurricanes pass through, or disasters occur regularly? If so you might want to consider hiking things up. Flood coverage is required in some states, so make sure you include this in heavy rain areas. Further, if you have pricey possessions in the home, you might want to consider adding on incidental coverage to protect them.

2. Personal possessions (and the value of those possessions) -
A good rule of thumb is to purchase insurance which is 50 to 75% of the dwelling coverage amount. Electronics, furniture, high priced furniture; these items and their cost can add up quickly if you were to have to replace everything, and didn't have sufficient coverage. So think of it in this manner; if you have a $200,000 n your dwelling you want to buy at least $100000 on the items which are in the home.

3. Liability coverage -
Do you have a dog which is prone to biting or is considered to be a dangerous breed? How about that pool which might increase the risk of drowning or injury if visitors come over with young kids? You have to insure yourself as a homeowner, to ensure you protect yourself from liabilities of this nature. Even close friends and family might come after you financially if something goes awry. Depending on the cost of assets, and whether you are considered a "high-net worth" homeowner, the amount of coverage you purchase will vary in every case.

4. Umbrella policy addition-
An umbrella policy is the "catch all" insurance policy you might want to consider adding onto the home owners insurance policy you purchase. this is even more so the case if you have extremely valuable goods/items in your home. You first have to consider the value of your personal possession and general coverage amount, in order to then determine how much more you might require, under your umbrella policy coverage.

5. High risk area -
No, not in terms of natural disasters, but the actual area/neighborhood your home is located. If it is a dangerous area some insurers might require higher premiums, due to the risk of theft or burglary. Adding a intrusion alarm/monitoring system might help offset these costs, but with certain insurers, you will still have to invest a bit if you live in dangerous/high risk areas for burglary/theft, or dangerous crimes.

There is no simple answer or solution when it comes to choosing home owners insurance, and no single policy is the same for every owner. These are a few factors to consider in choosing your insurer, coverage, and how much is enough, when it comes to protecting your home and your valuables.

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