How Much Homeowners Insurance Do I Need?

Dec 20, 2019 1 min read

Homeowners insurance helps protect in the event that a fire, hail or burst pipe damages or destroys your home or possessions — and it’s a lifesaver for many. Approximately one in 20 insured homes files a claim each year, according to the Insurance Information Institute.

Don’t wait until disaster strikes to think about your coverage — at that point it’ll be too late to increase it. Assess your policy and determine whether you need to purchase additional coverage before there’s a crisis.

But how much homeowners insurance do you really need? Here are four questions to ask yourself when evaluating whether your policy provides adequate protection.

1. How Much Would Rebuilding Cost? 

Your lender requires you to have enough insurance to cover the mortgage, but that amount might not be enough if a disaster decimates your home. How can you accurately calculate your homeowners insurance coverage needs? Consider how much it would cost to rebuild, including factors like local construction rates, square footage and material costs. Then, purchase a coverage amount that makes sense for you.

2. What Is the Value of My Possessions?

Your policy should include coverage to replace stolen or damaged personal possessions. Conduct a home inventory and make a detailed list of your belongings — from appliances to antiques. Take photos and keep a running tally of their approximate value. Your contents coverage should reflect the total value of your belongings.

3. Do I Need Extra Coverage?

Most homeowners insurance policies provide limited coverage for extras like collectibles and jewelry. Ask your insurer whether you’ll need to add a rider to cover special items.

4. Where Will I Live if My Home Is Damaged?

Check the coverage for “additional living expenses” provided in your policy. This covers the increased cost of temporary living expenses if you’re forced to move out of your home. Be sure to consider the length of coverage; some policies cap coverage at a certain number of days.

Your Personal Homeowners Insurance Expert

Reviewing your homeowners insurance policy — and making changes as needed — could help keep you from having a costly claim denied. Talk to your Farm Bureau agent to ensure your coverage is what’s best for your family and your home.

Want to learn more?

Contact a local FBFS agent or advisor for answers personalized to you.