Structural Home Insurance

If you own the building you should have home insurance to insure the building. While this most often applies to the home you own and live in it also applies to buildings you own and rent.

The home insurance coverage should pay for repairing or rebuilding if your home is either damaged or destroyed by one of the named perils on the policy. Most home insurance policies will not pay for damage by earthquake or flood. Protection for earthquake or flood would require a special perils policy.

You probably have a good idea of what your home is worth. If not, you can make a reasonable guess based on your local real estate listings. You can even speak to a real estate agent directly. They often offer free estimates of your home's worth and the exercise can be very interesting. It's usually a 'no obligation' estimate - but ask and be sure.

Now, if you paid $250,000 for your home you should have $250,000 in home insurance for the structure, right? Wrong. The $250,000 you paid will include the cost of the land itself, which you shouldn't have to re-build (If you live in an earthquake prone area this may not apply to you! But you'll need special "peril" coverage).

What you want to insure is the building - and you want to insure it for repairs or re-building. Assuming that 1/5 to1/4 of the cost of a home in an urban area is the lot then you will need home insurance for the structure to the tune of $160,000 to $200,000 on a $250,000 purchase price.

Not comfortable with that amount of insurance? To be really sure get an appraiser who will appraise the house separately from the building lot.

Remember, you will have to revisit your home insurance regularly - yearly is great (on the renewal of the policy), but at least every 3 to 5 years. Costs of repairs increase, just like everything else.

Read more general information about Home Insurance Policy, Condo Insurance and Renters Insurance. Read specifics about Structural Home Insurance, Home Content Insurance, Home liability insurance, Additional Liability Coverage, Title Insurance, Flood and Earthquake Insurance, and Living Expenses Home Insurance. Don't miss the sections about Home Insurance Savings, Types of Home Insurance Policies, What Home Insurance Covers and Level of Home Insurance for definite information you should know before you buy.

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