Having enough homeowner's insurance is vital if you ever need to file a claim, yet many homeowners are uncertain about how to find out if they have enough. The best way to do this is by talking to a homeowner's insurance agent (such as Family Insurance Centers) about your policy and by making sure you do the following three things.
Ask for replacement value
When you purchase insurance for your house, there are two main methods insurance companies use to calculate losses after homeowners file claims. One is called actual value and the other is replacement value. Having a policy that pays out with replacement value is a better option, as this option will give you enough money to replace your house and things you own if they are destroyed. The other option gives you cash for the current value of the things you own and does not consider how much it would cost to replace them.
Purchase riders for your policy
Secondly, you should consider purchasing riders, also called endorsements, for your policy for anything that your regular policy will not cover. For example, if you own a very expensive piece of jewelry, you should realize that your normal policy probably will not cover the full value of the item. If you want the item covered fully, you would have to name it separately on your policy and ask for coverage. Insurance companies often call this "adding a rider" to the policy, and you will need to do this for anything that is not covered on your policy. If you are not sure what to add, ask an insurance agent to help you determine what should be included on your riders.
Increase your liability coverage
One other thing you could consider doing is increasing your liability coverage on the policy. Liability coverage is not needed if your house burns down, but it is necessary if someone gets hurt while they are at your home. If this person decides to sue you for injuries, your liability coverage would kick in and pay the damages for the incident. Because of this, you should make sure you have enough liability coverage on your home insurance policy.
By taking these three steps, you can make sure that your homeowner's insurance policy covers everything you own, which is vital if you ever lose your home to a fire or other natural disaster. To find out more details about home insurance, contact an insurance company today.