The National Directory of Certified Public Accountants

Ask A CPA - Insurance

When Buying Home Insurance, Which Options Should I Include?

Many policies offer "market value coverage" which may not be enough to rebuild your house after a major disaster. You should look for a policy that offers "100% replacement coverage" for both your home and possessions. Also verify that the policy includes an automatic inflation provision. Generally, home insurance policies also include liability coverage to protect you from injuries that occur on your property. The minimum standard of $100,000 may not be enough. Consider increasing it to $300,000, $500,000 or as high as $1,000,000. Get price quotes for the additional coverage amounts. Also consider getting additional riders for items such as jewelry. Generally there is a limited maximum payout on jewelry theft losses. Also consider the geographic location of where you live when considering additional coverage for floods, hurricanes, tornados or earthquakes.

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