ANSWERS: 1
  • <h4 class="dechead">On One Hand: Don't Buy Too Much

    The National Association of Insurance Commissioners recommends that homeowners buy insurance equivalent to 80 percent of the home's value, so that the insurance company will pay total replacement value in case of damage. The home's value may be less than the homeowner paid for the home, so the home's purchase price should not be a factor in deciding the amount of insurance to buy.

    On the Other: Don't Buy Too Little

    When assessed home value goes up, the homeowner must also increase the amount of insurance. The homeowner can check home values periodically or opt for Inflation Guard Endorsement to do this automatically. Most mortgage lenders require that the homeowner insure the home for at least the remaining amount on the mortgage, regardless of true home value. The National Association of Insurance Commissioners also advises taking out endorsements on personal property within the home, especially jewelry, collections and furs. In certain areas, flood, earthquake, and windstorm coverage is called for. These types of coverage are generally not included in standard homeowner's insurance policies.

    Bottom Line

    There is no single amount of homeowner's insurance everyone should have. The National Association of Insurance Commissioners recommends getting quotes from several different insurance companies and checking those companies out with the state insurance company before purchasing a policy. The homeowner should give the insurance company all the information about the type of coverage he wants and any additional property or items that need coverage, to ensure the policy leaves nothing out.

    Source:

    National Association of Insurance Commissioners

Copyright 2023, Wired Ivy, LLC

Answerbag | Terms of Service | Privacy Policy