Some homeowners choose low rates of coverage in order to save money. Doing so could lead to your home being underinsured, and here are some things to think about to ensure you have adequate coverage.
1. Opt for replacement cost and not actual cash value. The cost of personal possessions decline over time, so you’ll want to ensure there’s enough money to replace them rather than being reimbursed for what they were worth at the time of a loss.
2. Ensure your policy has a “loss of use” provision that will pay for a rental home in the event you are required to relocate while repairs are being made.
3. Most policies do not cover flood damage, so if you live in an area that’s considered a flood zone, you could need additional coverage.