You know that you need home insurance to protect your California home and its contents, but how much coverage do you really need? In calculating your coverage limits, you'll need to consider not the resale value of your home and items, but rather the cost to fully replace them if they are destroyed or stolen in an emergency. Follow these tips to get as accurate an estimate as possible. 

Determining the Replacement Cost of Your California Home 

In calculating the cost of replacing your home for your dwelling coverage, the current market value is irrelevant. What you need to figure out is how much it would cost to completely rebuild your home from the ground up. Your calculations should be based on the cost of brand-new, comparable materials to your home's existing construction, including flooring, windows, countertops, plumbing, light fixtures, and other home components. Don't forget to factor in the costs of labor for rebuilding the home. 

If you took out a mortgage to pay for your California home, your lender will undoubtedly require you to have full coverage. This means that your policy limit must be sufficient to fully rebuild your home. You can add extra coverage to allow for inflation if you wish, and it is smart to get as much coverage as you can reasonably afford. 

Calculating the Replacement Cost of Your Belongings 

For your personal property coverage, you'll want a limit high enough to fully replace all of your belongings. To figure out how much you need, start by making a detailed inventory of everything in your home, including furnishings, decor, clothing, kitchenware and other personal items. Although some items may be older, search for new versions of each item. Even though you may have purchased your sofa at a garage sale for $50, buying a new one to replace it could cost hundreds or even thousands of dollars, and your policy limit should reflect that. 

Once you have found the replacement cost for all of your items, add them together to arrive at a total estimate. Then, add at least 25 percent to the total to allow for inflation and to cover any items you may have missed or forgotten. It is always better to err on the higher side than the lower side. 

Need Help Calculating Replacement Costs? 

The PolicyNow Insurance Services team is here to help. We'll work with you to evaluate how much coverage you'll need to fully protect your California home and its contents. Don't be shy about reaching out to us for assistance. Call 800-422-1251 today to get started. 

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