1. What is it going to cost to rebuild your place? We are not talking about what the cost to sell it is ?
What is the amount you should be insuring your house for? Use the current construction costs to rebuild. Take out the value of the land. If you were going to build it new…..right now! What would those costs be? Forget about what the mortgage is. Forget what you paid for the house. What would it cost to go to a contractor today and start from scratch? The contractor would estimate it by taking the square footage by the costs per square foot. The square footage costs can be found on-line sometimes. You can also call a homebuilder or a real estate agent to obtain the costs per square foot. Again, this is where you have wealth preservation! It is not the place to worry about getting low cost insurance.
2. What about the contents of the home. How much are they worth.
Policies vary in the total coverage they give you for this. Most of the time it is adequate but it might not be right for you. You need to look closely at what your possessions are worth. Some people will do a home inventory of their home once per year. This is a great idea. If you don't want to do this, at least film your contents. Get a good idea of what your contents are worth and if you think they are worth more then the coverage you have, call your agent – hopefully that is us and we will increase that for you. The premium is usually negligible.
3. Make sure you get extended replacement cost on a homeowners insurance policy.
It pays for your home to be repaired with materials that are similar in kind and quality to what was originally used.
There is no deduction for wear and tear or depreciation.
If the demand for materials and construction workers exceeds the supply this type of policy will pay whatever is necessary to make sure your home is back to its original condition.
What is going to happen if something does happen to my home, will I have increased expense?
Where would you have to go? Do you have relatives who would take you in for 6 months or more if something happened to your house or would you have to live somewhere else. Would those expenses be more costly then if you were living at home? Think hotel and restaurants. Additional living expenses are usually about 20% of the total amount of coverage on your house. Take a look at this amount and decide will it be enough. You can ask your agent for help.
How much coverage do I have in the event someone sues me?
Who in your house is covered? You, your pets, and your family members in the event of injury caused to others. Defense coverage is included outside the costs usually. You probably need a minimum of $300,000 of this coverage. You can get additional coverage by obtaining an umbrella. You need to discuss this with your agent because most homeowners insurance policies are underinsured for this type of coverage.
Let’s decrease premiums so you have low cost insurance.
There are many things you can do to create low cost insurance for your home.
Before purchasing a home, get a professional home inspection. Someone who can take a close look at your home and make sure there are no major issues.
Modernize your major systems such as heating, plumbing and electrical. This will help reduce your premiums. There are lots of other things you can do such as what type of roof you have or what type of windows you put in. Tell your agent.
Combine your insurance policies with the same company. This will many times give you a discount.
Get a security system. This will help keep you safer. It can also reduce the homeowners insurance premiums with some nice discounts.
Increase your deductible. Insurance is not a maintenance policy.
Talk to Sue Redmond. Low cost insurance is important and Sue can explain more ways to give you low cost insurance AND help you wlth your wealth preservation.
