Dave Paterson, a fire insurance expert and 30 year veteran in the insurance industry told us what he thought was important. “Probably the most important thing is to make sure that the limit on the dwelling coverage is sufficient to actually replace the home. There’s big litigation going on in this area right now on underinsurance. Many, many, many times the insurance industry sets the limit for the dwelling. Say it’s $100,000, but the actual repair cost that you find out after the loss occurred is $180,000, so right away, the insured has lost $80,000 simply because it relied upon the insurance company to set the policy limit for the dwelling. That policy limit controls other coverages. It controls the amount of personal property coverage. Usually, it’s a percentage of the dwelling policy limit.

Know the square footage of your home

Insurance companies base rebuilding costs on the square footage of your home. While you’d think that most of us would know the square footage of our house, a surprising number of us do not – and it can equate into thousands of dollars in repair costs. Bob Scott, a partner with the Advocate Law Group, offered advice on how to get the square footage of your dwelling. “The way for homeowners to quickly find out their square footage is to look at the real estate documents associated with the purchase of their house. Many times the square footage of the house is in the listing agreement or in the original listing documents for the sale or in some of the closing documents for the house. You should be able to find it in your file. If not, just talk to your neighbors and find out the square footage of their home. If the homes are similar, the square footage should be pretty close to yours and you can get a pretty good approximation that way. My suggestion is for an insured to know the square footage of the home and multiply that by $200 to $225 and say that’s the limit that I want.”

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