One of the biggest struggles for homeowners is determining the amount of insurance coverage they need. Without the correct policy, you could end up facing a huge financial burden in the event of a disaster. To ensure you're properly covered, consider these three factors before you choose a homeowners insurance plan.

3 Factors to Consider When Determining the Amount of Homeowners Insurance You Need

1. Cost of Your Structure

One of the most important aspects of your insurance plan is the repair or replacement of your physical structure. If your coverage isn't high enough to cover the full expenses, you'll be left responsible for the remaining costs. The purchase price or appraised value of your home only includes market value, so you need to determine the full cost of rebuilding the structure before buying a plan. You should factor in the square footage, construction materials, and custom features like cabinetry to get a correct estimate.

2. Replacement Value of Your Possessions

You also need to consider the cost of replacing your possessions. The structural aspect of your homeowners insurance policy doesn't apply to your personal belongings within the home, so you need to choose this coverage limit separately. To determine the amount of insurance you need, calculate the current sale price of the items in your household including clothing, electronics, and furniture. For extremely valuable belongings like jewelry and artwork, you may need to purchase additional coverage to ensure the replacement costs are included.

3. Potential Liability Costs

Another factor in the amount of insurance you need is potential liability costs. This area of your policy comes into play if you're deemed responsible for something that happens on your property or occurs to someone else as result of someone in your household. Such situations usually involve an injury-based lawsuit or damage to a neighbor's structure. If something like this occurs, your liability protection will help cover the required legal, medical, or repair expenses so that you don't have to pay out-of-pocket. In most areas, the recommended level of coverage is around $300,000, but your insurance agent can help you determine what you need.

Ensure your home is adequately protected by contacting Barron Mutual Insurance Company. Since 1891, the Barron County, WI, company has built a reputation around their honest, dependable, and affordable services. The local team of highly skilled insurance agents works with each customer to create a plan that matches their particular needs. Request a quote for your homeowners insurance policy online or by calling (715) 537-5141.