You're glad you have you have a homeowners' insurance policy when you experience a terrible incident like a house burnt down. You file a claim only to get something totally insufficient to rebuild your home, maintain you elsewhere while your home is being rebuilt and pay for your valuables. What could be wrong with these insurance companies? Before you lay the blame on your insurer, let's see if you did the right things …
Your home was $ worth 350K when you bought it 15 years ago. When you subtracted the land's worth you ended up with $ 330K as your policy limits. You've faithfully paid your premiums but you never took the time to review your policy at least once a year. Your home is now worth $ 400K. Furthermore, the costs of building and materials have gone up. So with $ 330K you're still short.
We could go into whether you should buy replacement cost coverage or extended replacement cost coverage. However, that does NOT matter as much as ensuring you do simple diligence …
1. Make sure you ask questions when things are NOT clear to you as read through policy terms.
2. Have an inventory of your valuables and make sure they are adequately covered. If your standard policy does NOT provide sufficient coverage, get a floater. Yes, this will cost you more but it will protect you better.
3. Review your policy at least once every year.
4. Review your valuables at twice a year.
5. Get and compare home insurance quotes from other insurers from time to time. You could get better rates for superior or similar coverage for many reasons.
Apart from the fact that these will ensure you always have adequate coverage, they also ensure you do NOT pay any more than necessary.