Before you start shopping for a homeowners insurance policy, you need to think about how much coverage to purchase.
If a disaster strikes, you’ll want enough insurance to rebuild the structure of your home, to help replace your belongings, to defray costs if you are unable to live in the home, and you’ll also want to have sufficient liability coverage.
Two main factors that determine the cost of your insurance are the value of the dwelling and your personal possessions.
To some degree you don’t have a choice about how much insurance coverage to purchase, since your mortgage lender will require coverage for at least 80% of the home’s value, or up to 100% of the amount of the mortgage.
Homeowners insurance also protects you in case you’re found legally responsible for injury or damage suffered on your property. Make sure you select a policy with enough liability coverage to protect all assets that could be targeted in a lawsuit.
Talk to your insurance agent about getting the right coverage for your needs and budget, while still insuring that your home, assets and belongings are properly protected.