You should follow the old adage, "Expect the worst and hope for the best," when insuring your property.
For home owners insurance you should have enough coverage in the case of a catastrophic loss (i.e. you lose everything). You will want to take into account how much it would cost to rebuild your home, any surrounding structures (like a garage) and all of your personal property you will have to replace.
On top of that, you will need to take into consideration the loss of use factor, which is how much will it cost you to stay elsewhere while your home is being rebuilt.
In summary: add up the following four items
1. cost to rebuild house
2. cost to rebuild surrounding structures
3. cost to replace personal property
4. cost to stay elsewhere for an extended period of time
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
The amount of coverage carried on a home is determined by the cost to replace the building and contents and the requirements of your lender. In California lenders cannot require coverage in excess of the cost of replacement but when prices rise lenders sometimes pressure homeowners to carry more coverage to protect their investment. The insurance company will require an independent evaluation of the reconstruction cost and your agent is the best person to help you.
There has been a great deal of discussion concerning catastrophic losses where neighborhoods or communities are destroyed. The problem then is a shortage of material and contractors to restore damaged dwellings. In these circumstances building costs can escalate quickly. If you sense that you might be in such a potential situation be sure to discuss that with your agent.
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For home owners insurance you should have enough coverage in the case of a catastrophic loss (i.e. you lose everything). You will want to take into account how much it would cost to rebuild your home, any surrounding structures (like a garage) and all of your personal property you will have to replace.
On top of that, you will need to take into consideration the loss of use factor, which is how much will it cost you to stay elsewhere while your home is being rebuilt.
In summary: add up the following four items
1. cost to rebuild house
2. cost to rebuild surrounding structures
3. cost to replace personal property
4. cost to stay elsewhere for an extended period of time
There has been a great deal of discussion concerning catastrophic losses where neighborhoods or communities are destroyed. The problem then is a shortage of material and contractors to restore damaged dwellings. In these circumstances building costs can escalate quickly. If you sense that you might be in such a potential situation be sure to discuss that with your agent.