The conversation got started at home because evidently we are over insured when compared to our neighbors. Figuring out the replacement value of our house doesn't give me a lot of concern, but after that what does everyone use for guidance for determining what insurance coverage limits you go with?

I know that's a pretty broad question but I'm looking to figure out what some good ideas or guidance may be.

What kind of insurance? Life, property?

Overinsured. I doubt that. I have had a million dollar umbrella policy for twenty years. Look at the awards lawyers are getting. I think your neighbors are probably underinsured.
You look at your assets, and see if lyou mind losing them. I can guarantee you if a doctor gets into an accident they are going for policy max.
Insurance agents are not all slimeballs. Sit down and discuss the issue with him. I have been through several natural disasters and that is when folks like your neighbor get screwed. They find out that they are greatly underinsured and have to take out a second mortage to put on a new roof.

If you’re referring to insuring your house you should be getting guaranteed replacement coverage so that in the event of a loss they will pay whatever the cost to repair or rebuild it.

Your agent should have told you of that option…

That’s not just broad, it’s unclear what you’re asking. Contents? Structure? Family Crown Jewels? LTD? Life? Liability? Cyber? Umbrella? Auto? Flood? Earthquake? Etc.


And my neighbor’s coverage would have precisely zero bearing on any of those. WTH do they know - probably asking a bunch of internet friends for input.

Right now it’s the personal property coverage that is the hot topic. The common ratio that I’ve been hearing is ~50% of the persons home value. Our firearms and jewelry have their own coverage due to exceeding the limits in our baseline homeowners policy (one decent mid-range AR shouldn’t put me over “normal” coverage in my mind) and after that we don’t really have anything that I would consider high dollar. We don’t have any expensive paintings, furniture, electronics, collections, etc. but I know that replacing all of the little items that we’ve accumulated does add up.

I believe 75% of dwelling limit is the default with State Farm (my carrier) and others likely have same or similar percentages. I agree that seems like a lot on the face of it, but if you do the detailed math on everything in your home from furniture to electronics to spoons and spatulas, you may be surprised how much all that adds up at replacement cost.

I actually went though this math in our first home - I was much more frugal, had more time and have always been detail oriented. I was certain it was a ridiculous number. As an aside I did end up with a near perfect inventory in the event my house burned to the ground then, now I rely on detailed pics of each closet, drawer, etc. to be able to recreate details if that happens.

What I found was, even at a rough estimate, I was at over 60% and probably was missing or underestimating some things. You can go through this exercise, but before investing that time I'd first ask your carrier how much that component of coverage is actually costing you, if they have options to reduce that % coverage, and if so what premium would be if reduced to say 50%

My guess is the savings won't even be close to worth it for the effort, but please let us know - I'd be curious as well.

eta - look at your declarations page, it will show the max coverage for this, you can compute what it is as a % of dwelling estimate.

Speaking of contents my 300,000 house insurance covers $150,000 of contents but I was surprised to learn that after a total loss (say burned to the ground) I don't get a $150,000 check to start replacing all my stuff. I have to compose an invoice so to speak listing every item and its value and they will pay that amount, up to $150,000. Heck even after reviewing various pictures I have of the inside of the house and shop I doubt if I would be able to remember 1/4 of my hand tools, clothes, etc. I really should walk around taking a video of the house, shop, garage, etc.

Rather than a video (unless you have very high resolution options) I'd recommend a bunch of close up photos at max resolution. Those are much easier to go through one by one and zoom in to be able to detail items, and would make it easier to include pretty good evidence supporting your claim list by list for each set of items. Last time I did this the room taking the most time was garage/shop which I just took my time and a couple beers to do one afternoon. Opened each drawer, cabinet, etc. and made sure to have decent lighting on contents. Kitchen was a close second, but you're entitled to everything in scenario you described.

Online or remote storage is an obvious requirement.

It seems like it wouldn't be your greatest concern to have to replace the items that are individually inexpensive, Such as spices as a random example, but that would be different if all of them were gone at one time. Even without a list I've got pics to support that there are ~60-80 bottles, at $5+ each that's close to $500. Again, not a big deal if someone breaks in and steals my spice drawer/cabinet, but is if they also took everything in my pantry, cabinets,drawers, etc. No matter what you're going to be out a lot, might as well minimize it within reason.

The real surprise for folks rebuilding is usually that they don't get a check for the house until after they rebuild it. Well, insurance will pay as you go for the project, but if you want to just walk away and not rebuild the payout is usually something like 50-60% of estimated value.

A couple years ago my son had a house fire. He had replacement value and it was well worth it. He put many,many hours preparing list for insurance co. He then had to go over with insurance company because they tried to cheap out. My son he could see how the insurance company tries to wear you down. My son’s example was a Major League Baseball cap, the insurance company want to reimburse for a $5 Amazon cap.