How much home insurance do i need – math required?
mrc1386 asked:
my home is currently insured for $250,000 but have a replacement cost of $350,000. My personal property is insured for $75,000 – including $10,000 worth of jewelry and $15,000 coin collection. these are growing in value.
my home is currently insured for $250,000 but have a replacement cost of $350,000. My personal property is insured for $75,000 – including $10,000 worth of jewelry and $15,000 coin collection. these are growing in value.
What other insurance do i need?
Bruno Kovalaske
Sounds reasonable to me. The insurance company will reduce the insurance payout by the value of the land.
First, insurance companies insure your home for it’s replacement cost (costs associated with rebuilding), for example, labor and materials. This is often confused with market value, in other words, your home may be worth $500,000, but only cost $250,000 to rebuild. Insurance companies will allow you to insure your home for more than replacement cost, but all you will ever receive if a loss occurs is replacement cost. It sounds like the riders you purchased for your jewelery and coins are correct, but as the value of those items increases so should your insurance coverage. As for what other types of coverage you should buy, I would make sure you have the highest liability limits your policy will allow you to carry, also ask your agent about a personal umbrella.
Bizarre. On a standard homeowners policy, personal property is at least 50% of the insured value of the building.
You need to be sure the house is insured to 100% of the cost to rebuild. The insurance agent should come out and do a calculation on that. Endorsements I’d heavily recommend include:
replacement cost on building & contents
ordinance or law coverage
backup of sewers & drains
Additionally, the jewelry and coin collection need to be re-appraised every three years, so you can keep the values current. Keep in mind, in case of a loss, unless you buy an “agreed value” endorsement on your collections, they will NOT pay you the insured value – they’ll pay wholesale cost to replace, which at least in the case of jewelry, is significantly different.
You need to sit down with your agent, and have THEM give you a complete needs analysis. They can ask you all the questions, and are familiar with the most common uninsured losses in your region.
Sounds reasonable to me
You are drastically underinsured on the house. It should be insured for 100% of the replacement cost.
You need to sit down with your agent and find out what other endorsements you may need.
Also, 75000 on personal property is a strange amount. It is usually 50-75% of the amount of coverage on the house.