Imagine how devastating it would be to lose your home in a fire. Now imagine not being to able to rebuild it completely because you didnt have the correct amount of insurance.
Selecting the proper amount of coverage is the single most important decision you can make with your homewowners policy. Without it, you may not have enough coverage to rebulid after a total loss. This is called ” insurance to value.” Below are some explanations and tips to help you make the right choices for your needs- and remember, if you need help, we’re just a phone call away !
What is insurance to value?
Insurance to value is the relationship between the amount of coverage selected ( typically listed as “Coverage A” or “Dwelling Coverage” on your policy declarations page) and the amount required to rebuild your home. Insuring your home for anything less than 100% insurance to value could mean you would not have enough coverage to replace your home in the event of a total loss.
A home’s market value reflects current economic conditions, taxes, school districts, the value of the land and location, and other factors unrelated to construction cost. The cost to rebuild your home is based only on the cost of materials and labor in your area. It is important that you insure your home based on its reconstruction cost, NOT it’s current market value.