How Much Home Insurance Do I Need
Homeowners insurance protects you in the event that your home or belongings are damaged, stolen, or destroyed. Its perhaps the most important form of financial protection, as most of your assets are tied up in your home. So how do you determine how much homeowners insurance you need?
Usually most insurance companies calculate how much they will pay for personal property to be 50% to 70% of your overall coverage. Therefore, if the replacement cost estimation of your home is $250,000, the personal property coverage under your policy would be $125,000 to $175,000 depending on your coverage.
How Much You May Need: Many homeowners insurance policies provide a minimum of $100,000 in personal liability coverage, meaning the insurance company can pay up to that amount in total to injured persons per occurrence. If you feel you need more protection, higher limits are available.
The cost of additional living expenses. If your home suffers significant damage, your homeowners insurance covers expenses to live elsewhere, up to a limit, while your house is being repaired. The majority of policies usually cover up to 20% of the insured value of your house, but it varies by policy. 2.
Homeowners insurance covers more than just your house in the event of a disaster — it also protects your belongings, savings, and more. And even though every home is unique, there are ways to estimate the amount of coverage you should consider carrying on your homeowners policy.
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