How Much Homeowners Insurance Do You Need?

When buying a home you think about the mortgage and the bills associated with owning a home. But, just as important, is to figure out what your homeowners insurance will cost.

It's especially important to figure out the cost of homeowners insurance to get an accurate budget of your living expenses.

What is the right amount?
The simple answer is that it depends on several factors that can determine how much you will pay for your homeowners insurance.

Choose a Deductible That's Right for You
Just like with a car, your deductible will impact the cost of your homeowners insurance. If you pick a plan with a high deductible, the annual premium for your insurance coverage will be lower. However, if you have to make a claim for repairs to your home, your out-of-pocket cost will be higher too. On the other hand, a low deductible will cost you more up front, but you will pay a smaller amount if you have a claim.  Filing claims can also affect your renewal premium.

Determine the Value of Your Home and Property
If you're buying an insurance policy to cover a home that's worth $500,000, you're going to pay more than someone whose home is worth half that amount. A solid assessment of what your home is worth will help determine the right amount of coverage you need.  The agent will review the home for Replacement/Re-Building costs to determine the best level of coverage for you.

The value of your personal belongings will be considered to make sure their value is included for Replacement in the event of a covered loss..

Your Claim History
Unfortunately, the price you pay for homeowners coverage can also be affected by your past insurance history. Homeowners who had fewer claims typically pay less for insurance than those who have more claims. One of the considerations that all insurers have to keep in mind is your level of risk to the insurance company.

Also consider

  • Are you buying an older home or a new home? That too will impact your policy.  
  • Is your electrical, plumbing, heating, A/C and roof in good order and has it been replaced recently.  
  • The type of construction of the home, its roofing, garaging, amenities; these can affect the replacement.
  • Do you own animals and certain types can affect the rating or coverage.
  • Do you have a a trampoline, swimming pool or other hazards that can affect the rates.

There's so much that goes into determining the cost of homeowners insurance. It's definitely worth contacting us to help determine the coverage that is right for you and within your budget.