How much homeowners insurance do I need? – Get a quote in a couple of minutes

Your home is likely to be your most valuable asset. To protect it, you need to have a comprehensive insurance policy for homeowners. But buying homeowner's insurance goes beyond paying for repair and replacement costs – it also protects savings and investments.

© Katleho Seisa / Getty Images
A man sits on the sofa to review his finances on the coffee table.

Although local and state governments do not require you to take out insurance for homeowners, mortgage lenders usually do. In fact, most lenders specify the amount of insurance that a homeowner has to bring, typically for the life of the loan. But mortgage companies only consider the amount of insurance needed to cover their investments.

Loading error

On the other hand, your family and assets have a much higher value than the physical structure of your home. That's why it's important to have sufficient insurance coverage across the board. But if it's the first time you buy homeowners insurance, the process can seem daunting. Before purchasing a policy, you need to determine what type of coverage is needed, how much coverage is needed, and which company is the best. Fortunately, finding the coverage you need is as easy as following a few simple guidelines. Knowing Homeowners Insurance The term "homeowners policy" generally refers to a number of policies that cover your home, its contents and other associated facilities. The various policies required must be determined, along with the coverage limits and deductibles required for each type of coverage. Policies for homeowners can include: Home coverage: home coverage is the primary policy for homeowners. It covers your home and associated facilities, such as a garage or carport. Coverage of other structures: Other structure policies cover structures that are not attached to your property such as an independent garage, shed or fences. Personal Property Coverage: A personal property policy covers the contents of your home, such as furniture and clothing. Additional living expenses coverage: an additional living expenses policy may cover some or all of the living expenses if moved from home following a qualifying catastrophe. For example, if a fire makes your home uninhabitable, your additional living expenses policy may pay to rent a temporary home while your home is being repaired. Personal Liability Cover: Personal Liability Policies help pay for complaints when someone is injured in your home or property. For example, if a child falls from a tree in your backyard, your personal liability policy may help pay a premium or attorney fees following a lawsuit. Coverage of medical payments: If someone who does not live in the home suffers an injury in the house or on your property, coverage of your medical payments can help you pay for your medical expenses. Medical payment policies typically pay even when you're not at fault. Flood insurance: Flood insurance pays for damage and loss caused by floods. Most property policies do not include flood coverage and many insurance companies do not offer flood insurance. Many homeowners purchase flood insurance through the national flood insurance program, run by the Federal Emergency Management Agency. Earthquake Insurance: Most homeowners' policies do not cover damage or losses caused by earthquakes. However, many insurance companies offer separate policies or specializations for housing policies that cover earthquake damage. Umbrella insurance: Umbrella policies help pay compensation claims after your personal liability insurance has reached its limit. For example, if a court assigns an injured person to $ 500,000 after suffering an injury on your property and your personal liability policy has a limit of $ 200,000, your umbrella policy may pay the difference. How much do I need insurance for home owners? policy, you need to determine the coverage you need. According to the Insurance Information Institute, here's how much insurance coverage you should have: Policy type Amount of coverage Home insurance Varies based on the cost of rebuilding your home Insurance of other structures 10% of home insurance coverage Personal property insurance 50- 70% of home insurance coverage 20% of home insurance coverageMedical payment insurance Varies according to the use of the property and your lifestyleLiability insurance Varies based on the total value of your assets Here are some tips you can use to determine the amount and types of homeowners insurance you need: Calculate the actual value and replacement of your home cost Different methods of calculating the value of your home can produce very results different. A real estate appraiser can assign a lower value to your home than its market value. But you need to look beyond the value of your home's sales to decide how much home insurance to buy. For example, if you have an older house, with plaster walls and custom finishes, you will have to hire expensive specialists to repair the damage suffered by a fire. Likewise, if you equip your kitchen with expensive industrial appliances, a standard deductible will likely not cover replacement costs following a disaster.Consider local construction costsBuy homeowners insurance to prepare for damage or leaks, so you need to know how much to repair or replace your home will cost. Research how much the supply of buildings and manpower will cost to restore your home to its current state or build a new equivalent home. Factors that affect the amount of coverage your home needs include the number of bathrooms it has, the materials used in its construction and its special features. For example, if your living room features imported Italian tiles, you may need higher coverage levels and a lower deductible to replace it. Inventory your personal items Determine the value and replacement value of your items, including furniture, works of art, appliances and personal items such as clothes and jewelry. You can easily replace objects like modern sofas and coffee tables, but objects like paintings and family heirlooms are irreplaceable. Often, insurance companies set limits on the amount of money they pay for individual items such as computers and works of art. If you own many valuables, you may want to consider increasing the limits of your policy or purchasing additional coverage for specific goods. Consider how you use your home and who uses it The location and use of your home can help you determine the amount of personal liability, medical payments and umbrella insurance you need. For example, a retired couple who rarely entertain guests may need less responsibility and medical coverage than a family that often hosts school age parties. Some features of the property can also play a role in the amount of liability and medical coverage you need. For example, if your backyard has many age-old oak trees, you may want to consider higher liability coverage in case one falls on your neighbor's house. Rental Rates in Your Area If your home suffers serious damage, you may spend weeks or months living in temporary housing while workers repair it. Find out how much it will cost for you and your family to rent a house or apartment in your area. Homeowners who live in expensive real estate markets, such as San Francisco or New York City, need additional coverage for living expenses. Insurance Claims for Homeowners After determining the insurance coverage needed for homeowners, it is time to start looking for suppliers and getting quotes. We recommend that you take a look at this list of the best homeowners insurance companies as a starting point. Most major insurance companies have an online quote tool that generates a price estimate based on information about you and your home. However, you can also call an agent and get a quote over the phone, which may be more accurate. When buying home insurance, it is a good idea to get different quotes from different suppliers. In this way, you can easily determine which provider can offer you the best offer for the amount of coverage you need.

Keep reading

Show full articles without the "Continue Reading" button for 0 hours.