Home is where the heart is.

It also can be where the heartache is when disaster strikes.

Long before something goes wrong, you gotta ask, How much homeowners insurance do I need?

A house is in ruins after a tornado.

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Homeowners insurance protects your home and possessions against a variety of perils.

This includes damage, theft and natural disasters such as floods, hurricanes, fires and earthquakes.

Mortgage companies require a certain amount of coverage.

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But unlike car insurance, there arent any state mandates requiring people to have it.

Even if you do the minimum to satisfy your mortgage company, it often isnt enough.

Friedlander said most people make the mistake of not having enough insurance to adequately protect themselves and their families.

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So, how much homeowners insurance do you need?

Policies generally cover:

Within each policy, there are typically three levels of coverage.

These levels of coverage become important after a covered event when you begin to repair or rebuild.

He usually recommends no less than replacement cost policies to his clients.

Its important to know what types of coverage you have and what situations are covered.

It is just as necessary to know what is not covered.

Or, what might be covered with additional restrictions or different deductibles.

Different policies cover specific problems for varied types of structures.

For example, you may need a condo policy, renters insurance policy, etc.

The policies have designations from HO-0 to HO-8.

How Much Homeowners Insurance Do I Need?

So, how much home insurance coverage do it’s crucial that you buy?

There are many factors to consider.

You are preparing for the worst-case scenario, not for a minor claim.

you’re gonna wanna be prepared for a catastrophic loss, Friedlander said.

Thats possible whether its hurricanes, tornadoes or wildfires.

In most cases, the land your house sits on will still be there after a catastrophe.

So, you dont need to insure that value.

What we typically see is a majority of homeowners are underinsured, Friedlander said.

It gives us a valuation based on the cost to rebuild, and we base the coverage on that.

Friedlander said actual cash value saves some money on premiums.

However, you will get less in the event of a major loss.

Replacement cost coverage is about 10% more in premiums.

But you will get about 30 to 50% more when you file a claim.

Peterson said it is important to ensure that unique things that happen in your area are covered.

that are not generally part of a policy.

Placing a value on your possessions is important.

Go room by room and consider taking photos or videos.

confirm to include things like:

You dont need to include your cars in this property inventory.

Vehicles are not covered by homeowners policies even if theyre parked in the garage.

To check that all of your pricey items are covered, Peterson recommended a separate personal articles policy.

He said dog bites are his most common liability claims.

He also sees people who dont believe they need it all the time.

They think nobody would ever sue them.

We find that a lot with insurance.

People dont want to pay for things until they have a problem, and then they wish they had.

People are nice until something happens.

The Insurance Information Institute recommends at least $300,000 in coverage, but many policies only include $100,000.

The more assets you have, the more coverage you need.

An umbrella policy extends your coverage to a higher amount.

You dont need to figure out everything alone.

We always recommend meeting with your insurance professional once a year.

We call it an insurance checkup, Friedlander said.

Review all your coverages and double-check you are protected.

Not having enough coverage can be a big mistake.

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