Do you have enough homeowner’s Insurance?

You never know if and when something will happen — whether it’s a big catastrophe or something less destructive – so you need to prepare!

It’s essential to choose the right company, the right price, and the right coverage for your specific situation. 

Keep in mind, homeowners insurance is really a collection of different kinds of coverage such as fire, theft, liability and windstorm wrapped up into a single policy.

Whether you’re a current homeowner who may need to upgrade your coverage or a potential new buyer who is purchasing home insurance for the first time, review these steps so you have the right coverage for YOU.

How Do You Determine Coverage?

Your coverage should be based on the square footage of your home. It must also factor in how much it will cost per square foot to rebuild in case of disaster.  

The costs to rebuild in the Denver metro area are higher than the national average. Thus, consider going a little higher than your insurance company may suggest.

Your insurance company will most likely require you to purchase coverage that insures 80% of the replacement value of the home.

Be sure to take into consideration everything that you have inside the home. Your belongings will also need to be replaced in the event of disaster.

Do You Have Enough Coverage?

Get current information about what your home is worth today, and how much it would cost to rebuild it. Again, you may want to go higher to reflect the Denver area’s average costs to rebuild.

Make sure that your deductible is set at a price that you can afford in the event that you must rebuild or do extensive repairs to your home.

If you’ve got a special art collection or a home office with equipment and supplies, you should be sure to let your agent know so that they can inform you about any additional riders that might be necessary.

What About Flood Insurance?

Depending on where live, you might not need flood insurance. However, you should talk to your agent about coverage for flooded basements that can occur. 

Being covered for the water damage from a flood in your basement is different than having flood insurance.  Talk to your insurance agent about the difference. Make sure you’re covered if you end up with water in your basement.

Click here for a map of Denver flood plain zones. Clear here for a map of the Boulder County flood plain zones.

Do You Need to Upgrade?

For current homeowners, meet with your insurance agent to discuss what coverage you have now. Let them know about any new home improvements or any new possessions that should be included in your policy. Your agent will come out and document these upgrades, take photographs, and let you know if you will need additional coverage.

With home values rising significantly in the last few years as well, you most likely need to upgrade your policy to cover that increase in value.

And finally, make sure you know the difference between Homeowner’s Insurance and a Home Warranty. Check out my previous article on Should You Get a Home Warranty? for more information.