How Much Home Insurance Do You Need?
How Much Insurance is Enough?
Happy Spring! As you clean out last year’s flower beds and plant new flowers, now is the time to review your homeowner’s insurance. Property values have gone up. Is your home currently insured for the correct value? Understanding how much home insurance is the right amount of insurance can protect you and your family in the event you suffer a loss.
House are usually insured for their full replacement value. This means that your insurance agent calculates the cost of rebuilding the exact same home at today’s construction prices in order to determine replacement value. To do this, he or she will measure the square footage of your building and take into consideration the materials used. Take note that the cost of building supplies has increased in the past year due to the global pandemic.
Various features such as a fireplace, hardwood floors, full basement, and number of bathrooms are put into the calculations. If you have some unusual and/or expensive items in your home– luxury stove, imported tiles, or customized paneling– tell your agent, so these can be factored into the value of your building.
Home Additions and Upgrades
Spending more time at home means many people have invested more time and money in home upgrades. Popular home improvements in 2020-21 are new decks, patios, and expanded kitchens.. It is important to notify your agent if you build an addition or make any substantial improvements to your home so that your improvements are completely covered by your insurance policy. This is one reason why it is so important to review your insurance coverage each year.
How Premiums are Calculated
Premiums are calculated based on a home’s value and, thus, some homeowners, particularly if they have already paid off their mortgage, may prefer to insure their house for less than the cost of a total rebuild, reasoning that it is highly unlikely they will suffer a complete loss of property. According to insurance regulations, a home must be insured for at least 80 percent of its value in order for a policy to fully cover the loss.
How to Save Money
One way to lower your premium is to raise your deductible. The deductible is your out-of-pocket expense, which you pay off the top when you make a claim. Deductibles can range from $100 up to $5,000. Insurance companies know that the larger the amount it that you are committed to paying yourself before making a claim, the less likely it is for you to make a claim at all. Thus, the premium on a larger deductible is much lower than a small deductible. Other ways to save money is to bundle ie take advantage of discounts when you insure your home and autos with the same company. The agents had the Crilly Insurance Agency can help you compare companies to find the best rates. Visit http://agency.nationwide.com/peter-b-crilly-in-annapolis-md to receive a free homeowner’s quote or call our office at 4140-571-1771- to speak with an agent.