Homeowners Insurance Coverage Options

If you have a mortgage, you are required to have homeowners insurance, but it's up to you how much coverage you have above and beyond what is required by your mortgage lender. If you own your home outright, you may still want to consider a homeowners insurance policy to protect your assets in the case of damage to your home or an accident on your property.

Generally, you need enough homeowners insurance to cover the following:

• The replacement cost of your home: Replacement cost is the amount it will cost to rebuild your house, excluding the land. It's not what you paid for your house, because depending on current construction costs, the price of rebuilding it may be more or less than you paid. Today, policies in the US are required to cover 100% of the cost of rebuilding your home. (Policies issued before 1990 were not required to cover 100% of rebuilding costs.) The replacement cost of your home can change because of improvements you've made or rising costs of construction materials, so you may need to revisit your coverage annually to make sure you're covered adequately.
• The contents of your house: Your personal property includes furniture, computers and other electronic equipment, clothes, furs and jewelry (up to a certain amount), artwork, etc. Most policies consider the value of your personal property to be approximately 50% of the amount of insurance you have on the house itself. If you think your personal items are worth more than this, you might want to complete a Property Inventory (PDF)Property Inventory (PDF)* of your possessions, listing and photographing all the items you want covered.
• The cost of living elsewhere: This is important if your home is damaged and you have to live elsewhere while it is being repaired. Coverage should cover rent or hotel bills, meals, and other living expenses incurred while you're out of your home.
• Liability: This covers you in case someone is injured on your property and needs medical care, or decides to sue you. It also protects you if something in your house or on your property causes damage to another house – for example, your tree falls on your neighbor's garage.

Call Wells Fargo Insurance to get all your questions answered and find the right homeowners insurance coverage that works for your situation.

Need more information? Read our frequently asked questions.
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