When you purchase homeowner’s insurance, you will need to have an idea of how much you need to insure your home for. There are a couple of steps to this process before you can decide on the amount of insurance to purchase. The first thing that you will need to determine will be the replacement value of your home. You need to acquire this amount of coverage because if your home is ever be completely destroyed, your insurance ought to cover how much it would cost to build your home new. Some may ask whether or not market value comes into play, and the answer is no. Market value is determined by many different factors, such as the current state of the economy, the neighborhood you live in, desirability, etc. These items are not factored into this value because they can make the price of your home fluctuate quite often, where the replacement value of your home is more consistent.Â
The replacement cost value is typically determined by the insurance carrier, using formulas derived from local building costs, the value of neighboring homes, etc.
You need to determine the value of your home’s contents. If your home is destroyed, your valuables will need to be replaced along with the structure. Your insurance company can also help you to figure out this number. Be sure to declare any high value items such as expensive jewelry or collectable items. These luxury things may require extra insurance.
You are now armed with the appropriate information to get an accurate quote for homeowner’s insurance. For more information about California homeowner’s insurance please visit http://www.aisinsurance.com/california-homeowners-insurance.
This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.
