Many companies will have a 10-percent cap. Guaranteed replacement cost insurance is expensive, but the coverage is worth it. Flood insurance is important, too, but most homeowners mistakenly think that they are protected from floods in their regular insurance coverage. However, if your home is worth more, you can find additional policies that will cover you above and beyond the government's maximum amount. Coutu says many homeowners are misinformed when it comes to their umbrella liability policies.
Experts generally advise consumers to carry umbrella liability policies equal to their net worth.
If you're worth hundreds of millions of dollars, how much liability coverage you carry depends on how much of a target you could be. A mistake homeowners often make is not increasing the value of their property and casualty policies as their home and assets go up in value. When assessing your insurance needs, don't forget to take all of your activities into account. If you have people who come in to work for you, you'll need a workman's compensation policy. If they get hurt in your house, you could be liable.