There are many decisions to make when buying homeowners insurance, but perhaps none are more important than how much coverage to get. If you don’t purchase enough, you could end up facing a significant financial burden if disaster strikes. Below are the various factors to take into account to determine what policy limits you need.

How Much Homeowners Insurance Do You Need?

1. Replacement Cost

The first step in deciding how much homeowners insurance to purchase is estimating how much you would need to rebuild your house completely. You want to have coverage that includes your home’s full value so you can recreate its current design if necessary. This means buying a policy for the structure’s replacement cost rather than it’s actual cash value, which subtracts for depreciation. To calculate this amount, consider square footage, local construction costs, inflation, home additions and renovations, unique features, and other buildings on your property.

2. Liability Risks

An essential part of homeowners insurance is the liability coverage it provides. If anyone is injured on your property or you accidentally damage someone else’s belongings, your policy would take care of their losses and your legal fees. The liability limit you choose will depend on the value of your assets, and if you have an increased risk of facing a lawsuit. Typically, you’ll need more coverage if you own a swimming pool, trampoline, or aggressive dog, as there’s a higher chance you could be held responsible for an injury.

3. Personal Property

Homeowners insurance will also replace your personal belongings if they’re stolen or damaged in a covered event. Thus, you must take inventory of everything you own to assign a suitable amount of personal property coverage. This includes items such as furniture, appliances, clothing, and lawn tools. If you have any high-value possessions, including jewelry, antiques, artwork, or firearms, you may need to buy a separate endorsement with higher limits than your basic policy.

If you’re looking for reliable and affordable homeowners insurance, let the agents from IGO Insurance help you find the right coverage. Based in Raleigh, NC, this agency has been dedicated to providing customers throughout the state with high-quality products at competitive rates since 1970. They’ll evaluate your unique needs and use their vast industry expertise to customize a policy that offers the best protection. Call (919) 782-1560 to set up an appointment, or visit them online to request a quote.