Don’t let complex language or extensive options confuse you when researching homeowners insurance. It should be a simple concept involving calculating the total value of your home plus its treasured contents, but splitting that amount into equal monthly payments plus a premium often results in a headache.
Then there’s liability insurance in case someone gets injured on your property and plans to sue. For Erath County homes, you would really want to buy some insurance just in case your beautiful home gets partially or fully destroyed in an accident.
For some homeowners, buying a “cash value” insurance policy makes the most sense. In the event your home gets destroyed, your insurance company will pay you cash comparable to the value of your home minus its depreciation. For others, the more expensive option is “replacement cost” insurance, which pays you in the amount equivalent to what it would take to rebuild your home from scratch using similar materials. This would normally make a lot of sense, except for the usual 20% fee on top of your home’s value when using this policy.
Most agents recommend buying an insurance policy for up to 80% of your home’s value because there is rarely an accident so encompassing that it
destroys your entire house. Be sure to check annually to see how much this value has increased as rising material and labor costs will undoubtedly require more insurance to maintain that 80% value.
If you’re really worried about protecting items within your home, you should do another annual inventory check to calculate the total value of all your possessions. Depending on your home insurance policy (you should always read the fine print), personal belongings will get covered for up to 75% of your home’s value if you’re lucky.
If you conduct your inventory check and determine its total value is higher than 75%, you may need to purchase more insurance. However, this is another gamble as some items are immune to things like smoke damage while others are more susceptible to water damage from a leaky pipe. It’s truly buyer beware.
If you need help finding the perfect insurance policy for your perfect Stephenville home, please contact us.