Home insurance coverage can be very confusing. To mold or not to mold? To flood or not to flood? But, in this post, we’re going to focus on maybe the most important part of your coverage—the amount. Finding the lowest rate sometimes coincides with whichever carrier will take you on at the least coverage. If my house would sell for $200,000, I definitely wouldn’t need more than $225,000 in coverage, right? Not necessarily.
Remember 200k is for selling a house, not building one. The cost of building materials and labor is always changing. And, if your house is old enough, they’re not going to be using remotely the same material as what your house is made from.
And, if your house is old enough, there’s a decent chance at least part of your home would be rebuilt with materials far different from what the original builder used. For example, are there specialty indoor lighting fixtures?
Also, how do you think what’s left of your old house gets cleared away? The cost of debris removal isn’t cheap.
Bottom line, you need to err on the side of too much coverage, rather than too little. Because if you were $100,000 short…then those are the breaks. One way to lower this possibility is by getting with a carrier that has full coverage that comes with a cushion (which sometimes is as much as 25%).
After all, this isn’t The Price is Right and you’re not in the Showcase Showdown. Trying to guess exactly how much home insurance you need is a game show you just can’t afford to lose!