Researching and purchasing home insurance can be a complicated process. To help make understanding home insurance a little simpler, we had Liberty Mutual representatives share the most commonly asked home insurance questions they get every day - and how they would answer them:
Q: How much homeowners insurance do I need?
A: Every home is different; the things that make your home unique are what factors into determining how much homeowners insurance you need to protect it. You estimate how much homeowners insurance you need by doing a replacement cost analysis. What is a replacement cost analysis? It's an analysis of how much it would cost to rebuild your home, how much it would cost to replace the personal property inside of it, and how much liability coverage you need to protect your assets. Features of your home, like if you have a finished basement or what type of material it was built with can factor into the replacement cost analysis.
Q: What's the difference between home replacement value and market value?
A: Home market value is the estimated amount your home is worth if you were to sell it. The replacement value is what it would cost to rebuild your home. The market value may change based on various factors in the real estate market in your area, whereas the replacement value is what you use to determine how much homeowners insurance you need in order to rebuild the home in the event of a loss.
Q: How are jewelry and other values covered on a homeowners' insurance policy?
A: Most homeowners' policies cover jewelry and valuables up to a certain limit, and often that limit may not cover the entire cost of replacing those items if they were to be lost or damaged. To protect these valuables, it's a good idea to schedule them. Scheduling something means adding additional coverage to your policy by getting something appraised and then insuring the full cost of the item in case it ever needs to be replaced.
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