Local Finance

How Much Homeowners Insurance Coverage Should You Have?

Homeowners insurance covers damage to your home, loss of personal property and liability protection. Although your mortgage lender likely requires sufficient homeowners insurance coverage to protect its own interest in your home, it may not be enough coverage to protect yours.

For help in determining whether your coverage aligns with your needs, take the following steps:

I. Personal Property Coverage

• Find out how much it would cost to rebuild your home — This number is different than the market or taxable value of your home. An insurance agent or professional appraiser can help you calculate what you would have to pay in today's dollars to rebuild what you have.

• Take inventory of the contents of your home — In addition to listing serial numbers and the date and costs of items you have purchased, consider making a video recording or taking pictures of the items in your home. Store this data in a safe place, such as a safety deposit box. Use this information to assess the value of your possessions.

Ideally, you'll want enough coverage to replace these possessions if they are destroyed or stolen. Standard homeowners policies typically cover your possessions at 50 percent of the value of your home. If the value of your possessions is greater than this amount, you can purchase additional coverage through riders or endorsements to help meet your needs.

II. Personal Liability Coverage

• Determine the level of coverage you need to protect your assets — The standard amount of liability coverage in a homeowners policy is $100,000. This covers liability claims, medical payments to third parties, and legal costs for any lawsuits brought against you. Depending on your assets, you may want additional coverage to help prevent you from having to liquidate your home, car, investments and/or other items if a liability exceeds $100,000.

After ensuring you have the right amount of protection, annually review your coverage to make sure it accounts for any recent major purchases and continues to meet your needs. For more information about protecting your home and other assets, consult your financial advisor.

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Brokerage, investment and financial advisor services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients.

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