Many homeowners don't give nearly as much thought to their home insurance policies as they should. Too many people simply choose the bare minimum coverage with the highest deductibles to keep their premiums low, never thinking about what would happen if the unthinkable occurred. Unfortunately, some of these people end up regretting their decision somewhere down the line. Here are three things you should take into account when determining how much insurance you need.
What Are Your Hobbies?
Home insurance needs should be carefully considered in conjunction with your lifestyle. For example, say you cook a lot. You're known for always being in the kitchen, whipping up fantastic creations and decadent, four-star meals. You have expensive appliances, the best pots and pans that money can buy, and every kitchen gadget under the sun. You are the proud owner of a fully-equipped gourmet kitchen.
According to the National Fire Protection Association, kitchen fires are the number one cause of fires in the home and injuries from a fire. It stands to reason that someone who cooks a lot may be more apt to experience a fire than someone who doesn't. Make sure your homeowners insurance policy reflects your hobbies to insure you are adequately covered.
Skip The "Actual Cash Value" Option
Insurance carriers often offer homeowners who are trying to save a buck the option of insuring their things for "actual cash value." This isn't a good idea as virtually everything in your home began depreciating the moment you bought it. If we look to the above example of the home chef again, kitchen appliances and equipment is expensive! If you insure everything for actual cash value rather than replacement value, you're going to be disappointed when it comes time to buy everything again. Your money won't go nearly as far. Make sure your policy states replacement value.
Check Your Policy Limitations
You'll also want to make sure that your policy coverage will actually cover your personal belongings in the event of a fire or other disaster. For example, you may think a policy that allows for $25,000 in personal goods coverage is enough, but is it? Stop to add up all the things you have in your home. Televisions, bedroom sets, mattresses, power tools, appliances, living room furniture, dining room furniture, clothing for every member of the family, jewelry, furs, paintings, antiques, art work—this isn't even half of what most people have! Make an honest appraisal of your personal items, and chances are, you will realize you aren't insured nearly enough.
Contact an agency, like Bishop Insurance Agency, for more help.