2torial #0790:
Learn2 Shop for Home Owner's Insurance (continued)

Estimate replacement costs

To determine how much insurance coverage to buy, you'll need to calculate the replacement costs of your home and personal property. To do this properly, you'll need the help of an appraiser. Here are your options:

A construction contractor. A construction contractor who is familiar with local building costs can inspect your home and assign a replacement value to it. You'll probably get a more reliable estimate from an independent source than from an insurer. Consult 2torial #0506: Hire a Contractor for further details.

Residential property appraisal institutes and organizations. Check in the phone book under "real estate appraisers" for the names and numbers of appraisal institutes and organizations in your area. These are umbrella organizations that provide referrals to pre-approved appraisers in their databases.

A state licensing board. In the U.S., state boards require appraisers to take courses, pass tests, and complete a minimum number of training hours before becoming certified. These governing boards also monitor appraisers and keep records of complaints and disciplinary actions against them. Don't expect a referral, but you can often access their databases to find a list of certified appraisers in your area.

An insurance company. Insurance companies will send their own appraisers. In fact, one way to evaluate an insurance company is to obtain a written estimate from an independent appraiser, and then compare this to the insurer's evaluation. If the insurer's evaluation is substantially lower, consider another company.

Aside from hiring an appraiser, you'll need to prepare an itemized list of personal possessions and their estimated value. This will not only help you decide how much coverage to buy, but it'll also prove to be invaluable evidence if you ever have to negotiate a settlement with an insurance company. The best evidence is photographs, videos, and receipts for your possessions. You can store them in a safe deposit box or in some other secure location away from home.