Arggg.. Don't say not enough, I thought it was heaps. If the worst ever happened, I'd be happy to do with the basis if I had to. $60,000 should buy most things we'd need as opposed to want !! Please say YES
I'd be very surprised if it was enough. Sorry - you've stumbled on one of my pet subjects - the perils of under-insurance! Here beginneth the sermon...
What people forget is how much their clothes etc are worth. For example, many ladies would have 5 bras @ $50 each, plus 10 pairs of undies @ $10 each, plus 10 pairs of socks @ $10 each etc - easily $500 per person just for underwear! Then 10 t-shirts @ $20 each is $200. 4 pairs of jeans @ $100 each is $400... try it! Each person probably has $3-4K of clothes. If you have Defence/Police/Fire etc uniforms, you can probably double it. Then there's media: CDs/DVDs 200@$30 ea = $6K. I have about $15K just of books!
A bunch of other things that may not seem big and you may not think of, but which add up if you have to replace the lot at once: tools in the garage, cutlery, crockery, linen and towels (like sue78, that's huge for me - I love Egyptian cotton, too), mattresses, light fittings, window treatments, saucepans, cleaning products, small electrical appliances (all your kitchen gadgets, electric razors, etc), computers, computer software, luggage, kids' toys, toiletries, carpet, rugs, paintings, etc.
FWIW, I don't think we're extravagant (except for in books, possibly linen!), and we have our contents insured for $120K. I doubt many people who are established (ie 30 or over) would have less than about $80-100K of contents. We'd actually insure for $140K except for the fact that our insurer would require us to have all sorts of extra security installed, that we don't want.
People often say - as wylie said - oh well, I'd be happy with $60K to replace everything. But let's imagine that you have contents that you say you could replace for $60K at garage sales etc, but that the insurance company says has a replacement value of $120K, based on buying things new at regular prices.
You have a one-room fire - say in the kitchen - and smoke and water etc damages some adjacent rooms, destroying half the contents of the house. The insurers will first do an audit of the remainder of the house, to figure out how much contents you
had. They estimate you have $60K of contents left undamaged, and thus that you actually had $120K of stuff and thus were 50% under-insured.
There are two lines they can take:
1) "You only insured 50% of your stuff. The stuff you had insured was the 50% of stuff that wasn't damaged in the fire, thus we're paying you zero."
Now I
believe that either public sentiment and/or law have prevented insurers from interpreting in this manner anymore, but they certainly used to many years ago. (Can any insurance insiders or lawyers confirm that this interpretation is now gone, or otherwise?)
2) "Here's $30K to replace the $60K of stuff actually lost, because you only insured half of it". Now it sounds like wylie would be happy with that, and would do bargain shopping to replace it for $30K. But wouldn't you rather have $60K and bargain shop, and pocket $30K for a deposit on another IP?
Or be able to buy all brand new stuff instead?
Of course it's
much more serious if you under-insure the
building; you may be able to bargain shop for contents, but it's exceedingly difficult for non-builders (and even for builders!) to cut 50% from construction costs. Imagine if it costs $400K to reconstruct your house, and you only insured for $200K. You pretty much have to re-build the house, and you're $200K out of pocket - or end up with a much lesser house than you had before. Or if I'm wrong and the first interpretation above is still in existence, you could have half your house burn down and get ZERO to re-build.
It costs relatively little to have more coverage; IMHO, better a bit too much than too little.
Apologies - here endeth the lesson.