How much home insurance coverage do I need?

There are a few key things you need to consider when you’re deciding your home insurance coverage amount.

The building or structure. You need to have enough insurance to repair or replace your home in case of loss or damage caused by events included in your policy (like fire, windstorm or earthquake). Be sure to base this amount on an up-to-date valuation of your property. If you’ve recently renovated or added a pool, for example, you’ll need to let your insurer know so it’s covered should something happen.

Many providers (like Sonnet) offer Replacement Cost for your home and other structures (like a shed or garage). In the case of a claim, this means we cover the cost to repair or replace your lost or damaged property (whichever is less). This applies no matter how much it costs, without any deduction for depreciation.

Liability. Most home policies start at a minimum of $1,000,000 liability. It seems like a lot, but legal costs and/or medical bills can quickly add up if you’re sued because you’ve accidentally caused damage to someone else’s property or accidentally injured another person. You can also raise the amount to have a little extra security in case something happens.

Your personal belongings (or contents). Take an inventory of what you have in your home and set your contents amount accordingly. This should include everything from your TV to your sock drawer. If something happens and you lose your home, you’ll need even the smallest items (like your socks!) to be replaced. And don’t forget about any stuff you have in storage.

When it comes to your valuables, insurers usually have maximum dollar amounts that they’ll pay out if certain specialty items are lost or stolen. These could include art, jewellery, fur, bikes, and watercraft. If the value is high for any of these items, you might need to add a special endorsement.

Optional coverage. Depending on the type of home you live in and your location, you might need more coverage. Sewer backup, overland water, hail, and earthquake add extra protection. These coverages do raise your premium – but usually not by too much.

If you’re unsure if you have enough home insurance, always speak to an expert. Just reach out to us via email or chat. We’re always happy to get into more detail about your home to help get you where you need to be.