Serving Santa Rosa, Escambia, & Okaloosa Counties

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How Much Homeowner's Insurance Is Enough?

Most mortgage lenders require homeowner's insurance. They want to make sure that if anything happens to your home, the balance of the loan is paid. But many people don't realize that they may need more coverage than what is required by the lender.

Homeowner’s insurance covers the actual structure of your home. Most policies also automatically cover your belongings that are in the home, up to a specified amount. But there are many factors to consider when determining whether you have enough homeowner’s insurance.

Your home itself should have enough coverage to rebuild it at current construction costs. That could be more or less than the amount you paid for it, and will likely be higher than the amount of your mortgage. Your mortgage lender will probably only require you to have insurance for the amount of the mortgage, so considering additional coverage is wise.

In the event of a disaster such as a hurricane, building costs rise. That means that your policy limits may be lower than what it will cost to rebuild. Extended or guaranteed replacement policies are available that will pay more than the standard policy's limits in such a situation.

Most policies cover your personal belongings up to a certain percentage of the coverage on the home itself. If this is insufficient, your insurance agent can sell you extra coverage. It is worth noting that the standard coverage often covers the cash value of your belongings. If you want them covered for full replacement value, you can obtain coverage for that at an additional charge.

Most homeowner’s insurance covers your living expenses should you be unable to live in your home after a covered disaster. That means that the policy will pay for a hotel room and your meals while your house is being rebuilt. If you feel that the limits of this coverage are too low, you may be able to increase them for a higher premium.

Homeowner’s insurance also covers liability to a certain extent. If someone is injured or incurs damage to their property while on your property, the coverage will include your court costs and damages up to a specified amount, typically about $100,000. Whether you need additional coverage depends on your specific situation.

To determine how much homeowner’s insurance you need, you can multiply the square footage of your home by the building cost per square foot in your local area. You can get that information from your real estate or insurance agent. You might also want to consider the risk of hurricane or tornado damage, fire hazards, risks to your personal belongings, and risks to those who visit you. These factors could necessitate additional coverage.

Adequate homeowner’s insurance is important in case anything happens to your home or belongings. Getting proper coverage when you purchase your home and keeping it after your mortgage is paid off can give you peace of mind. It's good to know that everything is covered in case of a disaster.


What Our Clients Say...

  • First time selling a home...Leslie is a wonderful agent to work with. This was my first time selling a home and I was apprehensive about it. She was very quick to respond to all my questions and help... View More..
    Erika Santiago

    First time selling a home...Leslie is a wonderful agent to work with. This was my first time selling a home and I was apprehensive about it. She was very quick to respond to all my questions and help me feel comfortable with the process. She has a very welcoming and friendly personality. I enjoyed working with Leslie so much that she is now helping me with a home purchase!
  • Buying my first house...Leslie went above and beyond to help me go about buying my first house. She was very friendly and was always quick to respond to questions I had. This being my first house, I... View More..
    Brian Simmons

    Buying my first house...Leslie went above and beyond to help me go about buying my first house. She was very friendly and was always quick to respond to questions I had. This being my first house, I had many. She went out of her way to make time to help me and I am pleased to tell everyone that is looking to buy or rent a home to contact her. Her friendly smile was contagious, and I will definitely use her again on my next house purchase.
  • Sold our home in 4 days...Leslie was such a joy to work with. She not only knows her stuff, but she is such a sweet person that wants what's best for her clients. She was always willing to drop... View More..
    Whitney Bennett

    Sold our home in 4 days...Leslie was such a joy to work with. She not only knows her stuff, but she is such a sweet person that wants what's best for her clients. She was always willing to drop anything to meet with and/or discuss things over the phone at anytime. She sold our home in 4 days, helped us find a new home, and we were able to have double closings just a few weeks later!
  • Cindy Cotton. I have been the beneficiary of the most incredible real estate firm. That would be Cotton Real Estate. I did not know them before I hired them to list my first home. After that they... View More..
    Constance Stoner

    Cindy Cotton. I have been the beneficiary of the most incredible real estate firm. That would be Cotton Real Estate. I did not know them before I hired them to list my first home. After that they were the ones we contracted with to sell our current home and purchase our next one. They have since sold that one for us and the purchase of the next one. We also bought some additional properties and of course, Cotton Real Estate is who we called. I have referred several people to Ms Cindy Cotton (mother and father-in-laws and good friends), who have had equally great service from them as we feel they are the BEST realtors that can be found. ANYWHERE. They are above board on their precision of the real estate market, will help you at every turn, are so educated about the contracts, what needs to be done, septic permits and inspections, the ever so awful qualifying and loans, and the quality and type of home that will work. I don't just recommend Cotton Real Estate to anyone looking to buy or sell, I would not use ANYONE else! Sincerely, Constance Stoner
  • Leslie was AWESOME! Leslie recently listed my home for rent and had it rented in 2 weeks. She was very responsive and would follow up with me to give me feedback on all showings which I greatly... View More..
    Paula Snow

    Leslie was AWESOME! Leslie recently listed my home for rent and had it rented in 2 weeks. She was very responsive and would follow up with me to give me feedback on all showings which I greatly appreciated because most property managers don't take the time to do this. Leslie found us a great tenant. She was wonderful to work with. We will definitely use her again. Thanks Leslie,
    Paula Snow
  • Excellent Work, Falen! Thank you for your excellent work on the sale of the Berryhill property and the acquisition of the Gulf Road house! Your advice was always well-informed. You made suggestions... View More..
    James & Linda Thompson

    Excellent Work, Falen! Thank you for your excellent work on the sale of the Berryhill property and the acquisition of the Gulf Road house! Your advice was always well-informed. You made suggestions which were useful. You pointed out items we had not considered. You were always professional while also being personable. You are an example for the real estate industry. Truly, Yours, James and Linda Thompson
  • Thank you Falen Haddy!
    My husband and I recently purchased a home in Pace , and Falen Haddy from cotton Real Estate was our realtor. She was amazing! She worked with us around... View More..
    Ashleigh Bowers

    Thank you Falen Haddy!
    My husband and I recently purchased a home in Pace , and Falen Haddy from cotton Real Estate was our realtor. She was amazing! She worked with us around our schedule to see as many homes as we wanted to see until we found THE one. I would recommend Falen and Cotton Real Estate to anyone and everyone!

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