How Much Homeowners Insurance Do I Need?
Everyone who owns a home should carry homeowners insurance. Your home is, more than likely, the single largest investment you will ever make and you need to protect that investment. The question is not should I have homeowners insurance? The question is how much homeowners insurance do I need? When trying to answer this question for yourself the things you need to consider are the cost of rebuilding your home, the value of your personal possessions, and how much liability coverage you need. In this article we will discuss each of these.
The first thing we will talk about is how much coverage you need for your home itself, the structure. If you paid, let’s say, $300,000 for your house you don’t necessarily need $300,000 worth of coverage to rebuild the structure. A large part of the cost of buying a house is not even the house itself but the land that it sits on. If your house were to burn to the ground you would need to rebuild the house but the dirt underneath your house would be fine. So you would need to figure out ahead of time what the cost would be to rebuild your home.
If your house were to burn to the ground you would also lose all of your personal property. Things like furniture, appliances, electronics, etc. would all need to be replaced. Most companies will cover personal possessions for 50% to 75% of whatever your home’s structure is insured for. You will have to determine the value of your possessions to know if that 50% to 75% would be enough to replace your belongings. Another thing to consider when insuring your personal property is that some policies will pay what it costs to replace the items and some policies cover the actual cash value of the items. If you have a 10 year old couch and an 8 year old television set the actual cash value of those items would be significantly less than the cost of replacing them with a new one. So it’s best to insure your possessions for their replacement costs.
The last thing to consider when trying to figure out how much homeowners insurance you need is the amount of liability coverage you want. Most policies will come with about $100,000 worth of liability coverage and some companies may even offer $200,000 or $300,000 for the coverage. If you have a lot of valuable assets totaling more than the amount of liability coverage your policy offers, you may want to consider adding on additional riders to provide additional coverage. For example if you have a lot of expensive jewelry, a rare art collection, or you own a business and the value of any of these things were say, $500,000 you would want to make sure you have enough liability coverage to protect yourself in the event of a lawsuit.
These are some of the things you need to think about before you can answer the question how much homeowners insurance do I need? To truly answer that question for yourself you’re going to need to spend some time assessing your needs and taking notes about the value of your assets and what it would cost to replace those assets. It would be a good idea to consult with a trusted financial professional to help you determine your needs.
Car Insurance is a must have in all states
Some level of liability auto insurance is enforced by nearly every country. States and governments are there to protect public from possible damages and losses. Getting hurt or be caused financial loss by a careless driver is something people should be protected. Therefore, the cost of being allowed to drive on the public roads is to have to buy car insurance.
Law enforcers will carry out regular checks to make sure that people follow the rules. They will issue tickets when they find drivers without the required minimum coverage. If this persists, heavier penalties will be imposed including taking the driving licence away. Generally, people are required to carry proof of insurance to be shown in case a spot check is carried out. These days, most police authorities have modern ways of checking if a vehicle has been insured or not.
State legislators are not concerned about your own damages at all. They only care about making sure that each driver buys enough coverage to pay for any damages and injuries caused to unsuspecting road users. Enforced third party car insurance is there to pay for losses suffered by other people when the insured driver is at fault. This can be a physical injury, property damage or damages to cars as well as consequential losses like loss of wages.
Motorists should not assume that they are off the hook as soon as they buy the lowest allowable policy. Third parties can come after drivers whose insurance is not sufficient enough to pay for all the losses. They are entitled to seek a full compensation and they probably will if the driver has properties and income to pay for it.
That is why it is better to increase the level of coverage. Today, there are many expensive cars and highly paid people on the road. Besides, causing grievous injuries to others will require substantial compensation payments. States will have to make sure that the cost of policies does not go up too high while they set up minimums. If they set high limits, many people may not be able to afford to pay for it. So, it is up to you to judge if you have enough coverage or not.
The next step is to look at possible losses you may suffer. Essentially, collision, comprehensive and personal injury policies are bought to cover likely losses a driver may suffer. There are a few more extras like rental reimbursement and roadside assistance. But they may not be considered essential by a few people. The cost of a policy must be kept in mind all the time. There is no point in going over the board and realize that you have to give up other things you like so that you can pay the premium.
n brief, collision pays for losses suffered in a crash. Comprehensive addition covers almost anything else that may happen to your car except collision like falling threes, theft, vandalism and accidental damages. Personal injury protection pays for the hospital and consequential expenses in case insured drivers and their family suffer injuries.
Nearly all auto insurers offer packages that include these key covers. Normally, it will not be a bother to locate a decent insurer with agreeable rates whichever state you live in the United States of America. This website is a good place to start searching for great deals.
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