​Your home may be your largest investment. Make sure your insurance reflects what it could cost to rebuild and replace what you own.

The Right Amount Is Different for Every Homeowner

The amount of homeowners insurance you need depends on more than your home’s purchase price or current market value.
A properly structured policy should consider:
  • The estimated cost to rebuild your home
  • The value of your personal belongings
  • Your potential temporary living expenses
  • Your personal liability exposure
  • Special property such as jewelry, art, or collectibles
  • Additional risks that are not covered by a standard homeowners policy
​
Insurance needs can change over time. Reviewing your policy regularly can help you avoid discovering a coverage gap after a loss.

1. Start with the Cost to Rebuild Your Home

Your dwelling coverage should generally be based on the estimated cost to rebuild your home—not its market value, purchase price, property-tax assessment, or remaining mortgage balance. 
​The market value of a property includes the land and may be affected by location, school districts, and real estate demand. Dwelling coverage is intended to address the cost of rebuilding the insured structure after a covered loss.

Rebuilding costs may include:
  • Construction labor
  • Building materials
  • Demolition and debris removal
  • Architectural and engineering services
  • Contractor expenses
  • Permits and inspections
  • Updated building-code requirements
  • Interior finishes and built-in features

The cost to rebuild can be higher than expected, especially after a major regional disaster when labor and construction materials are in greater demand.

What Affects the Cost to Rebuild a Home?

Several property characteristics may affect the amount of dwelling coverage you need:
  • The home’s square footage
  • Number of stories
  • Type of construction
  • Roofing materials
  • Exterior wall materials
  • Foundation type
  • Number of bathrooms
  • Custom flooring and cabinets
  • Built-in appliances
  • Fireplaces
  • Attached garages
  • Architectural details
  • Local labor and material costs
  • Required building-code upgrades
​Tell your agent about custom or upgraded features. A basic replacement-cost estimate may not fully reflect high-end finishes, recent renovations, or specialized construction.

​Consider Additional Replacement-Cost Protection

Some policies offer additional protection when rebuilding expenses exceed the dwelling limit shown on the policy.
Available options may include:
  • Extended Replacement Cost – May provide additional dwelling coverage above the stated limit when rebuilding costs are higher than expected.
  • Guaranteed Replacement Cost – When available, may pay the eligible cost to rebuild the home even when that cost exceeds the dwelling limit, subject to policy requirements.
  • Inflation Guard – May automatically adjust the dwelling limit over time to reflect changes in construction costs.
  • Building Code Coverage – May help with additional expenses required to repair or rebuild according to current building codes.
These options vary by carrier. Ask your agent what is included, what may be added, and what conditions must be satisfied.

2. ​Review Coverage for Other Structures

Homeowners insurance usually includes separate coverage for structures that are not attached to the home.
Examples may include:
  • Detached garages
  • Storage sheds
  • Fences
  • Gazebos
  • Workshops
  • Detached patios
  • Certain retaining walls
  • Other permanent structures
Other-structures coverage is commonly calculated as a percentage of the dwelling limit.
If you have a large detached garage, accessory dwelling unit, expensive fence, pool structure, or other substantial improvement, the standard limit may not be sufficient.

3. ​Calculate the Value of Your Belongings

Personal-property coverage may help replace belongings damaged, destroyed, or stolen because of a covered loss.
Your belongings may include:
  • Furniture
  • Clothing
  • Electronics
  • Appliances
  • Kitchenware
  • Tools
  • Sporting equipment
  • Books
  • Decorations
  • Outdoor furniture
  • Everyday household items
Personal-property coverage is often based on a percentage of the dwelling limit, but that amount may not match the actual value of everything you own.

Create a Home Inventory

A home inventory can help you estimate how much personal-property coverage you need and document your belongings if you have a claim.
Your inventory should include:
  • Photographs or videos of each room
  • Descriptions of major belongings
  • Purchase dates
  • Estimated values
  • Receipts when available
  • Model and serial numbers
  • Appraisals for valuable items
Do not forget belongings stored in closets, garages, attics, sheds, and storage areas.
Keep a copy of your inventory somewhere that can still be accessed if your home is damaged, such as secure cloud storage or another protected location.

Replacement Cost or Actual Cash Value?

How your personal property is valued can make a significant difference after a claim.
Replacement Cost Coverage:
May pay the eligible cost to replace damaged belongings with comparable new items, subject to the policy terms and limits.
Actual Cash Value Coverage:
Generally considers depreciation based on the item’s age and condition. The claim payment may be less than the amount required to purchase a new replacement.
Ask your agent how your home and belongings would be valued after a covered loss.

4. ​Identify Property with Special Limits

A standard homeowners policy may place special limits on certain types of property.
Examples may include:
  • Jewelry
  • Watches
  • Fine art
  • Antiques
  • Collectibles
  • Firearms
  • Musical instruments
  • Cameras
  • Silverware
  • Coins
  • Business equipment
If you own valuable property, you may need scheduled personal-property coverage or another endorsement.
Keep current appraisals and provide them to your agent when required.

5. ​Estimate Your Temporary Living Expenses

If a covered loss makes your home uninhabitable, loss-of-use coverage may help pay necessary additional living expenses while repairs are completed.
Expenses may include:
  • Hotel accommodations
  • Temporary rental housing
  • Additional food expenses
  • Laundry costs
  • Pet boarding
  • Storage expenses
  • Additional transportation expenses
Consider how much temporary housing costs in your area and how long a major repair or rebuilding project could take.
Coverage limits and time restrictions vary by policy.

​6. Protect Yourself with Personal Liability Coverage

Personal-liability coverage may help protect you if you or a household member is legally responsible for injuring another person or damaging someone else’s property.
Liability claims may involve:
  • A guest falling on your property
  • A dog biting or injuring someone
  • A child accidentally damaging another person’s property
  • Certain accidents occurring away from your home
  • Legal defense expenses
  • Court judgments or settlements
The right liability limit depends on your assets, income, household risks, and potential legal exposure.
Homeowners with significant assets may also want to discuss a personal umbrella policy with their agent.

7. ​Review Medical Payments Coverage

Medical-payments coverage may help pay certain medical expenses when a guest is injured on your property, regardless of who was legally responsible.
This coverage usually has a relatively modest limit and is different from personal-liability coverage.
Ask your agent whether the limit is appropriate for your household and property.

What Is Not Covered by Standard Home Insurance?

Separate coverage may be needed for:
  • Earthquake damage
  • Flooding
  • Certain water or sewer backups
  • Landslides and other earth movement
  • Business property and business liability
  • Home-sharing or short-term rentals
  • Certain high-value belongings
  • Service-line damage
  • Equipment breakdown
  • Identity theft
  • Some types of mold or deterioration​
Coverage varies by policy and carrier. Ask your agent about exclusions and optional endorsements before assuming a risk is covered.

8. ​Choose a Deductible You Could Afford

Your deductible is the portion of a covered property claim that you are responsible for paying.
A higher deductible may reduce your premium, but it also increases the amount you must absorb after a loss.
When choosing a deductible, consider:
  • Your emergency savings
  • The amount you could comfortably pay after a loss
  • Whether separate deductibles apply to certain risks
  • Whether deductibles are fixed amounts or percentages
  • The potential savings from selecting a higher deductible
Do not choose a deductible based only on the lowest premium. Make sure it would remain manageable during an emergency.

Three Steps to Review Your Home Insurance

1. Update Your Home Information
​Tell your agent about renovations, additions, new roofing, upgraded kitchens, detached structures, or other property changes.
2. Inventory Your Belongings
​Document what you own and identify valuables that may need additional coverage.
3. Review the Full Policy
​Compare dwelling, personal property, loss-of-use, liability, deductible, and optional coverage—not only the premium.

When Should You Review Your Home Insurance?

Review your coverage at least once a year and whenever your property or household changes.
Contact your agent after:
  • Remodeling your kitchen or bathroom
  • Adding a room or accessory dwelling unit
  • Building a detached garage or shed
  • Installing a pool
  • Replacing the roof
  • Purchasing expensive jewelry or artwork
  • Starting a home-based business
  • Renting part of your property
  • Buying new furniture or electronics
  • Making major landscaping or exterior improvements
  • Experiencing a significant change in local rebuilding costs
Keeping your agent informed can help maintain more accurate coverage.

Shopping for Home Insurance?

​We can compare available coverage options from multiple insurance carriers.
Prefer to speak with an agent? Call (714) 534-0072