Homeowners’ insurance is a valuable form of protection providing you with reassurance during a crisis. When a disaster happens, homeowners’ insurance can save you a significant amount of money, time, and stress. However, it’s important to know what type of home insurance plan is the best fit for your property without paying for more than necessary.
This is particularly important with the rapid rise in home insurance prices over recent years. According to Statista, the average premiums for homeowners’ insurance in the United States increased from $764 in 2005 to $1,211 in 2017. Premiums have risen for various reasons, including the increase in the cost to build homes and subsequent higher home values.
Factors Impacting Home Rebuilding Costs
The cost to rebuild your home may not necessarily be equal to its market value. You can often gain a strong sense of exactly how much homeowners’ insurance you need by learning how much it costs to reconstruct your property. Two factors that typically play a large role in determining your property’s rebuilding costs are local construction costs and the structure’s square footage. However, there are several other contributing factors that can impact home rebuilding costs, such as:
- The total number of rooms and bathrooms
- Improvements, remodeling and renovation projects
- Special features (fireplace, skylight etc.)
- The addition of structures such as sheds and garages
- The type of material used to build your property and the style in which it was built (e.g. rambler)
Determine The Amount of Insurance Necessary for Belongings
The Insurance Information Institute recently reported that a majority of homeowners’ insurance policies allow coverage for your possessions at roughly 50 to 70% of the insurance on your property. Depending on the types of belongings you have and how much you own, this may seem like an insufficient level of coverage. Fortunately, there are simple actions you can take that will help you evaluate whether or not you have an adequate level of insurance coverage.
Much like a business needs to regularly compile a detailed, organized list of everything it has in stock, you as a homeowner should also keep track of all your possessions, especially those most valuable. Should you ever need to file a claim in the et of a fire or other catastrophe, the process will be much simpler if you have previously taken the time to create a detailed home inventory. This is particularly important if you own high-value items such as jewelry, expensive clothing, exotic artwork, and objects that belong to collections. These types of items could easily become destroyed in a flood or a fire and be difficult to replace.
Determine The Amount of Liability Insurance You Need
Liability insurance is a form of protection that shields you against lawsuits for property damage or bodily injury. If you are a property owner and/or hold savings and investments whose value exceeds the limit of your liability policy, a separate umbrella or excess liability policy may be an advisable option for you. How much you pay for an umbrella policy depends largely on the degree of risk that you represent.
A minimum amount of underlying liability insurance on your policy will typically be required to acquire an umbrella or excess policy. As an additional precaution, you may also be able to add an “inflation guard” clause to your policy. This will cover you against increases in costs related to building materials, or costs associated with replacing sophisticated features in your home (e.g. carvings).
Contact The Homeowners’ Insurance Experts
Speak to the professionals at Southern State Insurance in Alpharetta, Georgia for more information on the process of determining the amount of homeowners’ insurance appropriate for your situation. Founded in 1992, we have since grown to become one of the largest, privately-held independent insurance agencies in the Southeastern U.S. We have access to nearly every major insurance carrier and are dedicated to assisting our clients with obtaining plans that offer optimal value. We provide a diverse array of options and emphasize the importance of building deep, long-lasting relationships.
At SSI, a standard home insurance policy will cover your property’s structure, liability protection, your personal belongings, and basic living expenses so that you are able to comfortably move forward in the event of a disaster. Remember that installing certain features in your home, such as a burglar alarm or smoke detector, and updating your electrical and plumbing systems often help to reduce your home insurance rates. Call Southern State Insurance today at (888)-800-4824 or contact us online to learn more about our products, including auto insurance and business insurance.