If your home has suffered devastating damage, the last thing you want to find out is you don’t have enough insurance. But how much do you really need?
Think Beyond Market Value
When deciding on how much insurance to buy, many people mistakenly think solely about market value. This is wrong. Market value is simply the selling price of your home. It goes up or down based on the economy, the supply and demand for homes in your neighborhood, local employment levels and other factors. Market value has no connection to building costs.
Instead, we recommend you Insure to Value.This means getting enough coverage to completely rebuild your home, in a timely manner with like, kind and quality materials, all at today’s prices.
Determining the Amount You Need
To determine how much insurance you need, first get an accurate appraisal to find out your home’s replacement cost. We use a calculation based on the finished area of your home and make adjustments to consider your home’s special features such as air conditioning, extra bathrooms, fireplaces, or any other improvements.
Some homes, such as historic or heritage properties cannot be insured for exact replacement since some features are not replaceable in either workmanship, materials or practical costs.
If you make substantial improvements to your home, say by adding an extra bathroom, finishing the basement or building a deck, you may need to increase your policy limits to reflect the actual costs to rebuild your house. Remember, call us any time for assistance.