How Much Homeowners Insurance Should You Buy?

Homeowners insurance is a valuable asset, but how do you know how much you need? There are a few issues you can consider to help you determine how much coverage to buy.

Budget is an important consideration. You want to buy the most coverage you can comfortably afford, but will still give you the benefits you need. Raising your deductible can help lower the cost of your premiums.

If your home were destroyed, how much would it cost to rebuild it? This is different from the value of the house altogether which also includes the price of the land it sits upon. Rebuilding the house structure then should be less than the property's total worth.

Home-based businesses may require additional coverage, especially if you receive clients in your home. In some cases a home-based business may still need to purchase a separate business policy.

If you have expensive items such as special computer equipment, an art collection, antiques or furs, you might want to purchase a floater to cover these possessions. Jewelry coverage usually ranges from $1500 on up to $2000. If you have jewelry that costs more than this, a floater will be needed to sufficiently insure it.

Sources

1. Ways to Lower Your Homeowners Insurance Costs. Retrieved June 6, 2008, from http://www.pueblo.gsa.gov/cic_text/housing/12ways/12ways.htm