How Much Home Insurance Do You Need?

The amount of money you pay monthly to your insurance policy will dictate how much protection you will get in case tragedy strikes. This is the sad realization of many who have experienced disasters and calamities these past few years. Surely, for those who experienced the wrath of hurricane "Katrina" or typhoon "Ketsana" and the damage brought about by earthquakes, there’s no such thing as too much. However, for those luckily unharmed by such events, the littlest amount is already excessive.

Therefore, this begs the question: how much is enough when it comes to home insurance?

The Insurance Standard

Because the value of properties and insurance policies vary, there cannot be any one amount that can be considered as the standard regarding the value of an insurance policy. However, real estate and insurance experts advice that instead of considering the premium, what you should look at is how much you will get from your coverage vis a vis the value of your property.

First off, ask yourself, will your policy be able to match the cost of your property? Insurance experts suggest you get a policy that offers 100 percent value replacement. Some homeowners are often tempted to get coverage with a lower premium. However, a low premium (the amount you pay monthly or yearly) means low recovery as well.

A home insurance will also cover the contents of your home or your belongings. Needless to say, you can protect every single item you own. Most policies will cover around 50 percent of the value of your items. Experts suggest that you get a policy that will give you coverage for your belongings according to their cash value. To do this, do a list of all your belongings (at least the ones that can be covered) and take note of the value. Take special note of appliances and furniture, although expensive electronics and even luxury possessions such as jewelry can be covered as well.

Insurance for Protection

You get insurance policies not only to replace belongings that you lost, but also to protect you during certain events. For instance, if you become liable to an injury or a death (this happens when the accident occurs inside your property), you need protection against lawsuits. Make sure your insurance offers coverage against these situations, so you wouldn’t be left alone to fix your legal and consequently, monetary responsibilities.

Lastly, your home insurance should cover for your temporary shelter while your home is being repaired. Many homeowners are shortsighted and only get policies that cover the repair and construction of the house alone. An insurance policy should also cover expenses beyond the replacement of real estate and personal property.

If all these four are covered by your policy, it is a very reliable policy, regardless of its price. Remember: the lower the premium, the lesser the protection it can give you. It's better to invest on something that offers full protection rather than aim to save money. You'll never know when you'll need the coverage of your insurance.