1. Consider Current Construction Costs When Buying Home Insurance\u00a0<\/h2>\n\n\n\n
Let\u2019s just get right to the worst-case scenario: your home burns to the ground, leaving nothing but soot. <\/p>\n\n\n\n
Okay, that\u2019s harsh. But the point is that if you insured your home ten years ago, you\u2019ll get a fraction of what it would cost to replace your home if it was destroyed by flood<\/a>, earthquake, or fire. <\/p>\n\n\n\n You need to crunch the numbers to figure out what your home is worth in relation to current construction costs in your community. To do that, find the local per-foot construction costs by asking a real estate agent, your homeowners insurance agent, or a building contractor\u2026whoever you trust. <\/p>\n\n\n\n Then multiply your home\u2019s square footage against that per-foot cost, and that\u2019s what it would take to rebuild your home today. Keep in mind that this is only a good starting point to your home\u2019s real value because it doesn\u2019t factor in the land upon which it\u2019s built and the intrinsic worth of all of the stuff inside your home. (Don\u2019t worry, we\u2019re getting to that next.) <\/p>\n\n\n\n Speaking of ballpark figures, this tabulation will be rough. But again, you\u2019re only trying to get a general idea of whether your current level of homeowners insurance coverage is enough. So now think about what it might cost to replace\u2026everything. <\/p>\n\n\n\n Start with the highest value items \u2014 your most expensive electronics, art and antiques, and jewelry. Most home insurance policies only cover categories of limitations. You might have a $2,000 cap on jewelry, for instance. Think about the pricey items you\u2019ve bought since purchasing your policy. If you have one necklace worth $5,000, your current limitation might not even come close. <\/p>\n\n\n\n Discuss with your homeowners insurance<\/a> agent whether it\u2019s worth getting add-on coverage for certain valuable items. This is usually very affordable, but the additional sense of security might be worth millions.\u00a0<\/p>\n\n\n\n Warning: we\u2019re going to get morbid again. Once more, we\u2019re going to ask you to imagine Biblical-proportion floodwaters<\/a> consuming your town. Or solid sheets of fire. Or\u2026you get the idea. Sometimes really bad things happen, and you\u2019re suddenly homeless. <\/p>\n\n\n\n Well, not homeless. You and your family might be able to crash on the couches of friends and family for a while, but eventually you (or the family and friends) will want to be on your own again. That means temporary housing. It means hotels or by-the-month apartment housing or executive housing, or something unplanned. <\/p>\n\n\n\n What does that cost? Your homeowners policy might have something called Additional Living Expenses, or ALE, built into it. This is what your insurance company will pay for you to live elsewhere in the case of an emergency. Not just that. It\u2019s also supposed to cover restaurant meals and related expenses. <\/p>\n\n\n\n Many standard homeowners insurance policies offer 20% of the covered value of your home in ALE. So if you have $300,000 in coverage, your ALE might be worth $60,000. Sounds like a lot of money, doesn\u2019t it? But what does temporary housing cost in your locality? Let\u2019s say you and your family had to live elsewhere for four months. That\u2019s $500 a day in living expenses. Is that enough where you live? Ask your homeowners insurance agent if it seems reasonable. <\/p>\n\n\n\n Liability is what protects you if someone else gets injured on your property. Read your policy and see what your current limits are. Then consider whether that\u2019s enough. <\/p>\n\n\n\n Has your situation changed? For instance, if you have more visitors than the average person, or if you run a business from your home, you\u2019re likelier to have more guests than if you live a solitary life. <\/p>\n\n\n\n But even in that situation, you can be vulnerable. Consider a large limb breaking from your tree<\/a> and falling on pedestrians or car traffic on the sidewalk or street outside your property. <\/p>\n\n\n\n Also, consider whether you\u2019re \u201cworth suing.\u201d If your bank account has grown, the lawyers of injured parties might figure it\u2019s a good strategy to bring legal proceedings against you. Make sure you have adequate homeowner\u2019s liability insurance coverage<\/a> against that threat. Standard limits might be around $100,000, but experts say you could need as much as $300,000 to $500,000 in liability coverage. <\/p>\n\n\n\n A lot of our advice has ended with some variation of \u201cask your homeowner\u2019s insurance agent<\/a>.\u201d That\u2019s because there is no bigger expert than the agent with which you partner on the financial protection of your home. <\/p>\n\n\n\n When you deal with an independent agent, you have on your side someone who doesn\u2019t just represent one company. Instead, they\u2019ve contracted to represent the insurance products of multiple major carriers. Therefore, when they go shopping for coverage on your behalf, they can find the best insurance product for you and your family, at a price you can afford <\/p>\n\n\n\n Pick up the phone and dial (800) 455-8276<\/a> to talk with an independent homeowners insurance agent from Vern Fonk Insurance. Or meet face to face with an agent at an office location near you<\/a>. You can also get a quick home insurance quote online<\/a>.\u00a0\u00a0<\/p>\n\n\n\n2. Do a Home Inventory to Get an Estimate of the Value of Your Home\u2019s Contents\u00a0<\/h2>\n\n\n\n
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<\/figure><\/div>\n\n\n\n3. Find Out What Temporary Housing Will Cost You\u00a0<\/h2>\n\n\n\n
4. Configure Your Liability Needs\u00a0<\/h2>\n\n\n\n
5. Get Yourself an Independent Insurance Agent\u00a0<\/h2>\n\n\n\n
Get Affordable Home Insurance Today \u00a0<\/h2>\n\n\n\n