Money Essentials

Properly value your home

Know how much homeowners insurance to buy.


First, you need to determine the cost of rebuilding your home.

Insure your home for its replacement cost -- that is, the amount it would cost to rebuild it if it were totally destroyed. That means determining the average local building cost in your region, and applying it to your home's size, style, and quality of construction.

Your best resource for this is a builder. For a flat fee, you may be able to have a local contractor go through your home and provide an estimate. Try to find someone who builds individual, custom homes that don't benefit from the economies of scale that tract homes offer.

If you want the same antique moldings, stone fireplace, and plaster-and-lathe walls as before, make sure the builder takes that into account. Otherwise, the estimate may reflect less costly modern materials.

You could also invite an insurance or real estate agent to your home. An agent who visits your home can eyeball the construction quality and point out any special features.

If you deal with a direct marketer (a company with no local agents), you can better ensure proper coverage by accurately reporting your home's details -- built-ins, antique wood, glasswork, upscale kitchen appliances, marble bath tile, etc.

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