How much dwelling coverage should you have on your home owners insurance policy?

Answer 1

On your homeowners insurance policy, you should have more than enough dwelling coverage to rebuild your house. In this state, that is all it makes sense to have and it does not make sense to have any less. Due to the way that homeowners works and its cost, it is stupid not to have less! For example, partial damage is paid according to the percentage of the damage against the percentage of the value of the building and the percent damaged. Say your house is worth 500,000 and you carry insurance of 50,000; with a deductible of 1,000 . Then say you have a windstorm. It does 20,000 worth of damage to a room on the back of your house. Now we do the math:

50,000 is 10% of 500,000. So we take 10% of 20,000 and we get 2,000. Then we take away your 1,000 deductible. That leaves 1,000. So by saving not very much money, you got almost nothing for your damage. If your entire house had burned down, you would have gotten 50,000.