Why do I need building and contents insurance?
Due to the current economic recession, home robberies are on the rise. If someone breaks into your home, you could lose some of your most valuable possessions.
If you have home and contents insurance, your insurer will pay for the replacement of those belongings. If you don’t have it, you’re out of luck.
What else does it cover?
In addition to covering your personal belongings such as furniture, clothing, electronics, jewelry, kitchenware, tools, sporting goods, etc., homeowners insurance pays to rebuild or repair your home after it has been damaged.
It also offers liability coverage, so if someone injures themselves on your property, your insurance will pay for all court-awarded damages, your legal fees, and any necessary medical expenses.
And if you have to leave your home while it’s being repaired or rebuilt, homeowners insurance will pay your hotel, motel, and restaurant bills, plus other additional living expenses.
What is not covered?
Standard policies will not cover damage to buildings or personal property caused by an earthquake, but most insurers will sell you earthquake coverage as an addition to your policy.
Flood damage is not covered by standard policies, but FEMA flood insurance is available through many insurers.
How much coverage should I get?
First, you need enough coverage to rebuild your home and other structures on your property, such as detached garages or greenhouses. To figure out how much coverage you need, ask a local builder or real estate agent what the building cost per square foot is in your area and multiply that figure by the square footage of your home. Then get estimates for other constructions.
For personal belongings, you need sufficient cover to replace the contents. Take an inventory of everything you own, including the value of each item, and use the total value as the amount of content you need.