Las Vegas real estate, mortgage, appraisal blog

A recent press release from bills.com showed that close to six out of ten American homes are underinsured. This means that if there is any loss, due to fire or a tree branch or any other number of reasons, the policies may not cover rebuilding of the house. Andrew Houser, co-CEO and co-founder of bills.com said to look for the following coverage when looking for homeowners insurance:

1. Structures: A homeowner who has a mortgage generally must be insured at least for the amount of the mortgage. Many properties, however, require a higher benefit amount based on personalized factors. For example, the policy should cover rebuilding costs in the area. Rebuilding costs should take into account the style and quality of the home. (For example, a basic amount will not provide enough benefit to rebuild a recently renovated, gourmet kitchen.) Be sure recent additions are covered. Also, older homes might require extensive updating to meet new building codes.

Other specialized policies include guaranteed replacement coverage, which provides for higher construction costs in times of increased demand -- for instance, following a natural disaster, when many homes require repairs -- and "inflation guard" policies that automatically increase the benefit amount to account for inflation. "Be aware that standard homeowners' policies do not cover damage from flood, earthquake or lack of maintenance," Housser said. "Separate flood insurance can be purchased from the federal government."

2. Possessions: A typical homeowner's policy covers personal possessions in the amount of 50 percent to 70 percent of the covered home value. Owners can purchase policies that cover replacement value or actual cash value (the item's worth based on its original purchase price minus depreciation). People who have valuable belongings -- electronics, jewelry, silver, furs or art collections -- can purchase insurance riders, or additional coverage.

3. Living expenses: Be certain a policy covers this important category. For most homeowners, if a catastrophe caused a situation requiring reimbursement from the insurer, they would need to live elsewhere for a period of time while repairs are completed. The costs can add up rapidly enough to lead to financial disaster.

4. Liability to others: Most policies offer a certain amount of coverage -- usually a minimum of $100,000 -- to protect a homeowner who is deemed liable for an accident or injury on his or her property. However, in today's litigious society, many experts advise purchasing higher amounts of coverage, up to $300,000. Homeowners with many assets, high public visibility or hazards on their property (such as dogs or a swimming pool) might add an "umbrella" policy that can cover millions more in liability.

In order to understand how much coverage you should have you will need to first know what the value of your home is. State Farm says that one of the best ways to do that, initially, is by speaking with your appraiser. If you already own the home you can contact an appraiser to help estimate the replacement cost. Appraisers such as the ones here, at Appraisers of Las Vegas, are constantly vigilant in their knowledge of home values.