If you live in New Jersey and are planning to remodel your home, or have just finished adding a bathroom or putting in a new deck, now might be the time to review your NJ home insurance policy limits. When you do review your policy remember that there’s a difference between the cost to buy and the cost to rebuild. Therefore, you can’t simply rely on your home’s market value to set your insurance limits.

By having an appropriate amount of insurance coverage you’ll be able to rebuild your home in the event of a total loss. However, that replacement value depends on the physical characteristics of your home, as well as the price of labor and materials in your area. It’s important to realize that, in most areas, these costs increase with time.

Understanding your coverage needs

The right agent can estimate the typical cost of rebuilding your home based on the average costs of materials and labor in New Jersey. However, this number won’t necessarily reflect any major upgrades you may have made to your home or the cost of replacing any of your home’s unique features, unless you specifically inform your agent about these major upgrades. For a less than exorbitant fee, you can hire a building contractor that can help you decide what might work (in terms of cost) for whatever remodeling job you may wish to have done.

Performing a home inventory is recommended

Most insurers would recommend doing a thorough inventory of your home’s contents. Compare the value of your belongings to the contents, or personal property limit listed in your NJ home insurance policy, and make sure that they match up. You and your agent should do a review and make sure your belongings are fully covered. This can help to determine how much coverage you’ll need in the event of a total loss due to fire, or some other catastrophe.

Using a video camera is perhaps the easiest way to do an inventory of your home. That way, you can record, as well as describe, items as you walk through your house. A video camera and a home inventory checklist will provide a thorough overview of your valuables. Store your video or photo inventory off-site, so you won’t lose it if your house is completely damaged.