The cost to rebuild your home is its replacement value. This can be very different from the estimated market value or actual purchase price. In most cases, it costs more to rebuild the home you own than to buy a new one. This is an important insight into why your Dwelling (Coverage A) limit is so important.
Deciding How Much Home Insurance is Enough
The agents at Harbor Insurance Group will work with you to estimate the replacement cost for your home and to adjust your policy limits from time to time as needed.
It is critical that you provide us with accurate, updated information about your home and contents. If your dwelling limit accurately reflects your home's true replacement cost, some insurance companies will pay more than the limit if a covered loss is greater than the limit on your policy. Ask us if Home Replacement Guarantee or Extended Dwelling Coverage is available in your state.
Once a review of your home and possessions indicates you are properly insured, it's a good idea to reexamine your home insurance policy coverages and limits from time to time, especially whenever you make additions or improvements to your home.
Be Sure You Have Enough Home Insurance
Here are some steps you can take to reduce the danger of being seriously underinsured:
- Call us - If you have questions or concerns about the limits in your homeowner insurance policy, ask us to show you how those amounts were calculated. This will also give you an opportunity to make us aware of any overlooked information.
- Read your policy - Certain property, such as jewelry, and certain perils, such as earthquake or flood, is better insured separately. Knowing what is covered and for how much will help you insure properly. If there is anything in your insurance policy you don't understand, contact us and ask for an explanation.
- Tell us about home remodeling projects - At each annual renewal of your home insurance policy, you receive a new Policy Declarations page showing limits of coverage and optional coverages. Review this information. If you do any significant remodeling to your home or add a family room, extra bedroom or bathroom, etc., tell us about these changes so your coverage limits can be adjusted to cover the improvement.
- Consider whether your home insurance policy provides all the protection you need - Does it provide coverage for extra costs resulting from building code changes? Does it automatically increase coverage limits annually to keep pace with inflation? Does it provide additional funds if the cost of rebuilding your home exceeds the policy limits?
- Find out whether your insurance company will stand behind agreed upon repairs after a claim - Some companies are willing to put this guarantee in writing.
- Find out if your homeowner insurance policy includes replacement cost coverage for contents - "Contents" includes clothing, furniture, appliances, and other personal property inside your home. If not, you can add it by endorsement. The cost is small, but the protection valuable. Replacement Cost Coverage pays for losses to your possessions at the cost of brand new items. Without this option, a covered loss to your personal possessions would be depreciated by their age and condition, reducing the size of your claim settlement.
- Ask us about supplemental Florida home insurance coverage - If you have an art collection, antique furniture, jewelry, or other valuable possessions, talk to us about supplemental coverages, such as fine arts or scheduled property endorsements to adequately protect your investment in these items. The cost is modest for the extra protection, and often the deductible is waived.
- Consider whether you should have more coverage for personal property (contents) than your policy provides. Personal property coverage is usually 70% of the coverage limit for the structure. Your limit may be lower than 70%. Supplemental protection is available for a small additional premium.
- Prepare an inventory of personal property items. , update it periodically, and keep it in a safe place outside your home, such as a safe deposit box at your bank. It will save you hours of time trying to list everything damaged or destroyed if you need to make a claim. It will also help ensure you don't forget some items. Harbor Insurance Group can advise you on ways to simplify the job of preparing a personal property inventory such as videotaping each room with descriptive information on the sound track.
Personal Umbrella Policies Offer Extra Protection
Besides making sure you have enough protection to cover possible damage to your own home and contents, you should also evaluate your exposure to liability risks. These result from damage to the property of another, or injury to a person, not a member of your household, for which you can be responsible. In recent years it's become common for homeowners to be sued for injuries or damages to others, even when there is no evidence of negligence by the homeowner. The reality today is if you have any appreciable assets, you are exposed to the risk of being sued. Even if you ultimately prevail in court, your legal fees and the months or years of worry and uncertainty can be a terrible burden on you and your family.
The Personal Liability coverage provided by your Florida homeowners policy usually provides a limit of $100,000 or $300,000. We recommend increasing this protection with a personal umbrella policy. Not only will it increase your personal liability, but also your auto liability. Limits are available from $1 million to $10 million and beyond. The cost of this coverage is usually very reasonable.
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