How to Determine the Right Homeowners Insurance Coverage

December 6, 2018

Threatened by natural disasters? Make sure you have enough insurance

If you own a home in an area threatened by natural disasters, it’s important to make sure you have enough coverage to get back on your feet. Here are the four areas you should consider when choosing your homeowners insurance policy.

Rebuilding/Repairing Home Structure

Your policy pays to rebuild or repair your home in the event that it’s damaged or destroyed by disasters identified in your policy. It’s important to note that standard policies typically don’t include damage caused by floods or earthquakes.

Rule of thumb: Purchase enough coverage that will allow you to rebuild your home.

Replacing Personal Possessions

Coverage for replacing personal possessions destroyed by an insured disaster is somewhere between 50 and 70% of your policy. This can also include possessions stored elsewhere (like commercial storage facilities). If you have items that you want to insure for their full value, talk to your insurance agent about adding personal property endorsements for each high value item.

Rule of thumb: Conduct a home inventory to ensure your coverage is enough to help you replace your possessions in the event of a disaster.

Covering Additional Living Expenses

If the damage to your home is significant enough that you must live elsewhere temporarily, ALE (additional living expenses) cover hotel, dining, and other expenses outside your standard living expenses like mortgage and utilities.

Remember: ALE coverage generally has limits—including time limits—but won’t impact how much your policy will pay to rebuild your home.

Covering Damage to Others

The liability portion of your policy is meant to (a) cover you if you, a family member or pet accidentally damage someone else or their property, and (b) cover any

medical expenses caused if someone is injured in your home. Liability helps pay for court costs and awards if litigation is involved.

Rule of thumb: Typical limits of liability start at $100,000. If you have considerable assets or would like more coverage, talk to your insurance provider about an umbrella policy.

The first step in preparing for a natural disaster is to make sure you’ve got the right homeowners insurance to meet you and your family’s needs. And don’t forget to talk to your insurance agent if you have questions about your policy or coverage.


About LifeExec

LifeExec is an online life management web application designed to help you and your family recover faster from natural disasters by securely storing critical life documents and home information in the cloud. To learn more and get a free 30-day trial, visit

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