How to Get the Most out of Your Homeowner's Insurance

A Homeowner's Insurance Update

Most people only think about their homeowner's insurance once a year when the policy renews, or if they have a claim. But your life changes almost every day, and you need an insurance program that can change with you. Here are a few things to think about when purchasing homeowner's insurance.

Is a Home Remodel Project in Your Future?

You may be looking for ways to improve your home shortly. Perhaps you want to upgrade your heating system, replace a leaky roof, or add on that sunroom you have always wanted. Before you get started, however, you will want to know how that remodeling project can affect your insurance needs.

Whether you are updating your kitchen or adding on another room, a remodeling project will likely add value to your home. As a result, you will want to check the property coverage limits on your homeowner's policy to make sure that they reflect any changes you make to your home, no matter how small or large the improvements may be.

If you hire someone to do the remodeling, you will want to make sure that he or she is adequately insured. Any contractor that you hire should have a certificate of coverage for both workers' compensation and contractor's liability insurance.

Always Use Replacement Value (RC)
Replacement Value will repair or replace with like kind and quality up to the policy limit. That is why your policy should have coverage for the cost to fully reconstruct your home with like kind and quality.

Rebuilding is different from buying. The cost to buy a home is different from the cost to rebuild, so you cannot rely on your home's market value to set your insurance limits. An appropriate amount of insurance coverage will permit you to rebuild your home in the event of a total loss. That replacement value depends on the physical characteristics of your home, as well as the price of labor and materials in your area. In most areas, these costs increase with time.