Unfortunately, many home owner insurance policies do not cover a dime more than the limits that are clearly outlined in your policy. Insurance professionals recommend making sure those limits accurately reflect the amount it would cost to rebuild or repair your home and replace its contents. This is because it is up to the homeowner to set their own limits and make sure that they are accurate.
“With the current changes in housing values and construction costs, it’s a good idea to revisit the cost of rebuilding every few years,” says J.D. Howard, executive director of Insurance Consumer Advocate Network (iCAN). In an interview with MoneyWatch.com, he offers this advice on how to get an accurate estimate of rebuilding costs:
- Hire a contractor: Hire a local contractor to inspect your home and prepare an estimate of how much it will cost to rebuild.
- Go online: Use a computer model similar to those used by insurance companies to get home insurance online.
- Take inventory: Compile a list of all the contents of your house and take pictures of every room. Email them to yourself along with a copy of the inventory so that the documents won’t be destroyed.
Once you have calculated the accurate limits, visit your insurance agent to receive a home insurance online quote that reflects those limits.