What’s the 80% rule in home insurance?

I've just started searching for my first home, and I'm trying to learn as much as I can about home ownership. I keep hearing about the 80% rule for home insurance—it sounds important, but I can't figure out what it means. What's the 80% rule, and how do I make sure to follow it?

Answer
Great question!
The 80% rule stipulates that when a home insurance claim is filed, your home must be insured for at least 80% of its replacement cost.
If not, your insurance provider isn’t required to pay out more than 80% of the claim. This rule mostly comes into play when you upgrade or make additions to your home. As long as you keep your insurance agent informed of new developments in your home, you should be able to follow the 80% rule just fine!
If you’re looking to learn more about home insurance, as well as get multiple quotes from different providers for free, sites like Jerry can be great resources for you! The site does all the legwork on finding the quotes—so all you need to do is focus on finding your perfect new home.
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Shannon Martin
Answered on Aug 09, 2021
Shannon is an expert in personal lines liability insurance with 13 + years of insurance industry experience. She also served as a special insurance liaison to AARP members for 6 of those years. She is a graduate of UL Lafayette and currently resides in NY with her family. Shannon is also an amateur juggler, ukulele player, and is a time travel paradox theory enthusiast.
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