Here at Arkansas Insurance Advisors we realize the importance of homeowners insurance and how critical it is for your house to be adequately insured. For most families their home is their greatest asset containing their most prized possessions. The name of our agency accurately describes the process we take with families to insure their home, we work as their advisor to properly structure homeowners insurance to fit their needs.
The first thing to consider for your homeowners coverage is the dwelling coverage which is the amount of coverage provided to rebuild your home in the event of a total loss. It is common for the dwelling coverage to be misunderstood; it should equal the amount it would cost to rebuild your home from scratch instead of its current value. If your home were to be a total loss from something such as a fire or tornado it would be required to build a brand new home. As most things, homes often decrease in value the older they become often creating a difference between the current market value vs. the cost of re-construction. Here is a video that discusses more about carrying adequate insurance coverage for re-construction.
The next thing to consider is the other structures coverage. Most insurance policies provide 10% of the value of the dwelling coverage for other structures but this is not always adequate. Other structures are defined as structures which are not connected to the house which need to be insured. Common examples of other structures are privacy fences, storage buildings and even swimming pools.
For most homeowners policies the next coverage listed is Personal Property which covers the contents in your home and also the contents in other structures such as a barn or storage building. The personal property coverage is often not given enough consideration, most people have many more possessions than they realize; just think how bad it was the last time you had to move. Once you have estimated the amount of coverage needed it is critical that you take inventory and keep record of as many of your things as possible; the better your records are the more smooth the claim process will be if it arises. Here is a video where AIA owner Elliott Carr discusses ideas for keeping record of your home inventory.