If a calamity happens, you’ll need enough homeowner’s insurance to restore your house’s structure, assist in replacing your valuables, cover expenditures if you can’t live in your home, and safeguard your financial resources if you become legally liable to others.

To establish the coverage and amounts you require, use these recommendations, from our friends at Legal Grit, the best homeowner’s property damage attorney in Florida..

Homeowners insurance coverage

Each insurance coverage has certain “perils” – the accidents you are shielded from. The Insurance Information Institute lists the following as some of the typical dangers covered by typical homeowners policies:

  • Damage from an aircraft, car, or vehicle
  • Explosions
  • Falling objects
  • Fire and smoke
  • Lightning strikes
  • Riots or civil commotion
  • Theft
  • Vandalism and malicious mischief
  • Volcanic eruptions
  • Water damage (from within the home only)
  • Weight of ice, snow, and sleet
  • Windstorms and hail
traffic light sign underwater

Although basic insurance covers a wide range of risks, they don’t always include the following:

  • Floods – Flood insurance must be purchased separately because it is expressly excluded from standard policies. 90% of natural catastrophes in the United States involve some flooding, so even if you don’t live in a flood zone, you should still consider getting flood insurance. 
  • Earthquakes – Typically, earthquake insurance is offered as a separate policy or as an addition to your current homeowner’s insurance.
  • Maintenance damage – Homeowner’s insurance does not cover mold, termite, and other pest infestations and damage brought on by neglect.
  • Sewer backup – Neither typical plans nor flood insurance cover sewer backups. Typically, coverage is offered as a separate policy or an endorsement.

How much homeowners insurance coverage do I need?

Each homeowner will require a different level of coverage depending on their particular needs. Your agent can assist you in determining the worth of your house to be used as the dwelling coverage amount. 

To assist you in achieving these objectives, standard homeowners insurance policies provide four types of coverage: dwelling coverage, personal property coverage, liability coverage, and additional living expenses coverage.

​​Dwelling coverage

Recommended insurance: equal to the cost of replacing your home. 

Your homeowner insurance policy’s dwelling coverage assists in paying for the replacement or repair of your house and any related structures, such as a garage, deck, or front porch, if a covered risk harms them. 

The replacement cost of your home should be the same as your dwelling coverage. The cost of rebuilding should be used instead of the value of your house. Depending on the location, the state of your home, and other circumstances, the cost of reconstruction could be greater or lower than its price. 

You can estimate rebuilding costs with the help of your insurance representative or an appraiser. You may calculate the cost by calculating the square footage of your home by the neighborhood building cost per square foot for the sort of house you are building.

For instance, if the cost of construction in your area is $100 per square foot and your home is 2,000 square feet, replacing it would cost roughly $200,000. The typical building expenses in your area should be known to a local real estate agent or appraiser. 

Personal property coverage 

green potted plant on white round table

Enough insurance is advised to replace all of your possessions. 

Appliances, furnishings, gadgets, sporting goods, toys, and even the food in your refrigerator are all covered under your property insurance policy and the structure of your home. Your possessions are covered if they are damaged, stolen, or defaced.

You ought to get adequate insurance to replace all of your possessions. Given that most people have no idea how much stuff they own, it can be very challenging to estimate this amount. Making an inventory of everything you own is a good idea; list every item in detail for each room and take photos of the more pricey items. 

You might require further protection if you own expensive or uncommon objects like jewelry, musical instruments, expensive sporting goods, or priceless works of art. Ask your insurance agent if you require additional coverage for these things, make a separate inventory of them, and estimate their replacement costs.

Liability coverage

As much as you can afford is the recommended level of coverage. 

Your home insurance’s liability coverage kicks in if someone is injured on your property. There are five typical liability claims that homeowners encounter:

  • Dog bites – Some dog breeds are excluded from conventional policies because they are deemed high risk. If you own a pit bull, an Akita, a German shepherd, or any other breed of dog that might be considered dangerous, speak to your insurance agent. 
  • Home accidents – Even if someone enters your property without permission and suffers harm, you are still accountable. 
  • Falling trees – If a tree on your property falls and injures someone, destroys a car, or wrecks a neighbor’s house, you can be held responsible.
  • Intoxicated guests – You might be held responsible for any injuries or damage an intoxicated guest causes to other people or property.
  • Injured domestic helpers – If someone is hurt while working for you to clean your home or maintain your lawn, you could be held responsible. 

Most house insurance plans include liability coverage of $100,000. It’s a good idea to increase that to at least $300,000 or even more if possible. You can purchase an umbrella insurance policy if you require liability protection that exceeds the limits of your home’s insurance policy.

If you work from home, are a volunteer on a board of directors, have a significant net worth, or are more likely than the average to be sued (for any reason), you should consider doing this. 

Additional Living Expenses (ALE) coverage

10% to 30% of your housing coverage is advised as recommended coverage. 

It could take months or even years to reconstruct your home if a fire or tornado damages it. Where would you call home while waiting?

If you’re suddenly forced to leave your house, your homeowner insurance’s additional living expenses (ALE) coverage functions as an emergency fund. It covers expenses like staying at a hotel or paying more to eat out when you can’t prepare food at home.

The costs of renting furniture, doing laundry, storing household goods, and boarding a pet may all be covered by your ALE policy. 

According to Legal Grit, most homeowners insurance policies determine your ALE as a portion of your dwelling coverage, typically 20%. If possible, choose the higher coverage if you have a big family (and many mouths to feed). 

Learn more on how to file your homeowner’s insurance claim.