Goals Matter

By Scott Spiker


The Online Magazine from First Command Financial Services

Staying The Course PrintRSS

Know Your Limits

Make sure your home is adequately covered against a major loss with regular reviews of your homeowner's insurance policy

Does your homeowner’s insurance policy cover the current costs of rebuilding your house? Construction costs are likely higher today than when you bought your home, perhaps exceeding current market values in your area. Make sure you can afford to repair or rebuild your home after a major loss with regular reviews of your policy limits.

Rebuilding is different than buying. Construction costs are driven by the price of materials and labor in your area,and in many areas, those costs have been going up. These increases are not necessarily reflected in the market value of your home. In fact, the rebuilding value of your home may be higher that the market value. That’s why it’s so important to take an active role in monitoring your dwelling coverage limits.

Seek out professional guidance to confirm how much money you will need to rebuild if your home is severely damaged or destroyed. At First Command, we can estimate the typical cost of rebuilding your home based on the average costs of materials and labor in your area. This number won’t automatically reflect major upgrades or the cost of replacing unique features. So you’ll also want to review your coverage whenever you start or finish a home improvement project.

When you’re reviewing your policy limits don’t forget your household possessions. To make sure you have enough insurance to replace your belongings, do a thorough home inventory. Compare the value of your belongings to the “contents” limit listed in your policy. The easiest way to conduct an inventory is with a video camera, recording and describing items as you walk through your house. Using a still camera works well, too. Store your video or photo inventory off-site so you won’t lose it if your house is damaged. And ask your First Command Financial Advisor for our home inventory checklist. We can use the completed document to recommend policy limits that ensure your belongings are fully covered.

At First Command, we recommend checking your policy limits once a year to make sure they are adequate to cover the expense of repairing or rebuilding your home following a major loss. Your First Command Financial Advisor is ready to help you make informed decisions about the amount of home insurance you need to help you recover in the event of a loss.

Homeowner’s insurance offered by First Command Financial Services, Inc., parents of First Command Financial Planning, Inc. (Member SIPC, FINRA). In certain states, First Command Financial Services, Inc. is registered as a separate domestic corporation and does business in California as “First Command Insurance Services.”