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So in regards to my post How Much Is Too Much I have been back and forth with my possible new insurance agent, and she has offered me an interesting tidbit:

“…regarding the home, currently you have it insured for $516,000.  Home insurance covers the dwelling itself and not the land because in the event of a total loss, the land would still be there.  We use a system where I input all the information about your home and it calculates a dwelling coverage amount.  The cost to rebuild a home is approximately $120 per square foot which comes out to $324,000.  Our calculator came out to $320,000 so your current coverage of $516,000 is more than sufficient.  I would recommend insuring it for $330,000.”

What does this mean?  Well, basically that I have been paying for 500k of insurance when really I wouldn’t need that.  In the event of total destruction, you still own the land your house sits on, and THAT shouldn’t be harmed in the horrible event of total destruction.  That property would still carry a value and shouldn’t need to be insured.  It might be worth pinging your insurance agency to see if you’re paying too much for homeowners insurance.

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