July 24, 2017
Did you finally add a new addition to your home? While you may be admiring your newfound architectural and design skills, have you taken the time to inform your insurance company of these additions? By doing so, they’ll be able to accurately update your property value to its current standing.
In order to guarantee you and your family’s financial safety if a disaster strikes, your home should be properly insured to value. If your home is not accurately valued, you may not be awarded full compensation for the value of your house after a claim. In order to understand the costs involved, let’s understand the value of replacement cost vs. market value.
First, market value and replacement value are not the same thing. Understanding the two could be the difference between correctly insuring and under insuring your home. The market value equates to the amount a buyer would pay to purchase your home and its land in its current condition. The replacement cost policy will pay for the repair or replacement of damaged property with materials of similar kind and quality. For example, you may have purchase your home for $170,000 – that’s market value. Replacement value would be estimated by your insurance company on a variety of different factors.
So, how do you know if you have enough coverage? Here are a few points to remember:
Properly reporting features in your house can save you money long-term. Make note of the quality of materials you purchase, accurate square footage and any other features of your home. In order to gain full compensation in the event of damages, these figures have to be updated and accurate.
A homeowner insurance inspection provides you with an accurate estimate towards the cost of your home’s insurance policy. The inspector will look for factors in and around your home that may affect your liability risks, including square footage and ceiling size in order to produce an accurate figure. To make things easier, you can even send a video tour of your home to your insurance agent to ensure that you have listed items correctly.
Be sure to update any additions to your home or any repairs you’ve had done. These may alter your homeowner policy and also affect pricing in order to have you covered.
It’s natural to be wary of the price when you purchase insurance, but realize that cheap coverage does not mean good coverage. A cheaper policy may not have the most important coverage you need or the company providing it may not have adequate insurance offers. In the case of your home, paying the premium will pay out in the long run if damages are incurred.
By taking the necessary precautions to prepare yourself in the event of a disaster to your home and following the points above, you can ensure that your losses are covered, providing you and your family with a sense of security and safety. Contact your independent agent representing Providence Mutual to see how you can be safely insured with us.