Daily Real Estate News | May 31, 2011 |How Much Home Insurance Is Enough?
Home Owner's insurance policies are often an after-thought--that is, until disaster strikes.
Home owners in Joplin, Mo., Tuscaloosa, Ala., and other cities recently flattened by tornados are now finding that out too late as they discover that their insurance policies likely will not entirely cover the costs to rebuild.
While most home owner's insurance policies will cover tornado damage, many home insurance policies are undervalued. In fact, one study from 2008 by Marshall & Swift finds that 64 percent of homes are undervalued for insurance purposes.
Home Owner's insurance coverage typically comes in three categories:
Many policies also will cover lost or damaged possessions at about 50 percent to 70 percent of the amount of insurance on the home. (The USA Today cites an example: If your policy provides $250,000 to rebuild a home, you may stand to also get $125,000 extra to replace your damaged belongings.)
Source: “If Disaster Strikes, Will Your Insurance Come Through?” Gannett News Services (May 31, 2011)
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