Homeowners Insurance – Insuring Your Home

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When selecting an insurance plan you will need to make sure that you have as much information as possible regarding your home, your personal property and the amount of land that your home is on.

Lets take a look at some information that will help determine how much homeowner's insurance you need and should get.

First: Your property value is determined three different ways: (a) how much you will pay in real estate taxes, this information comes from the county or city in which you live (b) how much you will be able to sell your house for , (c) how much it would cost to rebuild your home from structural damage. Each of these amounts can and will be different.

One of the deciding factors of your home worth is the location of your home, whether it is in the city or in the county. Another deciding factor of your home's worth is how much land your house is sitting on and of course the more land you have the more valuable it will be and again what kind of land do you own is it all wooded, used for farming or is it marshland which is land that holds water?

Second: The Bank is not going to want you to insure your home for less than its worth, and they also do not want you to insure your home for more than what its' worth. For example if your home is worth $ 125,000.00 the bank will not insure it for $ 100,000.00 or if your home $ 100,000.00 worth the bank will not insure it for $ 125,000.00 As with anyone who has ever purchased a home you will remember that the bank wants you to insure your home for the total mortgage amount. In some instances the value of the land is not considered as it will still be there even if your home is destroyed.

Third: There are calculating tools that have been developed by the Banks that will determine the worth of your home. You will need to answer questions about the size of your home as far as heated square footage, how it was built whether by wood framing, block or brick, whether or not you have vinyl, aluminum or brick siding. Also you will need to let the insurance company know if you have a standard house or if you have added special features such as cabinets, counter tops wood floors, carpet or tile floors. You can also have a licensed building contractor give an estimate of what it would cost to have these items replaced in your home

The more information that is given and the more questions that you ask of the insurance company the more accurate your proposal will be for the cost of your policy.

When deciding how much you need to insure your home look at what the cost would be if your home was completely destroyed and had to rebuild and replace your personal possessions. You do not want to over insure your home because you will be spending more money that you will not get in return and you do not want to under insure your home because then you will be left with the responsibility of covering the cost of repairs and your possessions that were not fully covered by your insurance if your home is completely destroyed.



Source by Ali Boyle