{"id":484,"date":"2019-10-31T02:54:50","date_gmt":"2019-10-31T02:54:50","guid":{"rendered":"http:\/\/www.insurance-education-group.com\/insuranceeducationgroup\/?page_id=484"},"modified":"2020-02-20T05:02:15","modified_gmt":"2020-02-20T05:02:15","slug":"correct-home-value","status":"publish","type":"page","link":"https:\/\/www.insurance-education-group.com\/correct-home-value\/","title":{"rendered":"Correct Home Value"},"content":{"rendered":"
[vc_row][vc_column][vc_custom_heading text=”Insure Your Home For Correct Value” font_container=”tag:h1|text_align:left|line_height:1.1″ use_theme_fonts=”yes”][vc_column_text]What is the right amount of home insurance you should have?<\/p>\n

The amount of insurance coverage is based on reconstruction costs, not the price you could get for selling your property. Below are a few guidelines that should help you decide what is a sufficient amount of coverage.[\/vc_column_text][vc_custom_heading text=”How Much Should I Insure My Home For?” font_container=”tag:h2|text_align:left|color:%231a4b9a|line_height:1.1″ use_theme_fonts=”yes”][vc_column_text]There is no “average” amount of home insurance that a home should have, because each situation is unique and the right amount of insurance has many different factors determining reconstruction costs.<\/p>\n

A common method of calculating the amount of coverage is to multiply the square footage of your home by a replacement cost per square foot value.<\/p>\n

Most homes fall into the range of $75 per square foot on the low end to $300 per square foot and even more. Where you live will depend heavily on where your home falls on this rough scale.[\/vc_column_text][vc_custom_heading text=”What Affects Insurance Cost Value?” font_container=”tag:h2|text_align:left|color:%231a4b9a|line_height:1.1″ use_theme_fonts=”yes”][vc_column_text]There are many different factors that go into determining what the replacement cost value of your home should be. Each company has its own unique formula for determining this.<\/p>\n

To get a rough idea, however, you should evaluate your property on the following criteria:[\/vc_column_text][vc_custom_heading text=”How Unique is Your Home?” font_container=”tag:h3|text_align:left|color:%231a4b9a|line_height:1.1″ use_theme_fonts=”yes”][vc_column_text]\n

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If your home is a tract home in a neighborhood where there are several homes that are exactly identical to yours, chances are it will be easier to replicate and thus the value you insure at can be a little bit less. On the other hand, if you live in an area where your home is one-of-a-kind, you might want to consider insuring your home for a little more.<\/p>\n<\/div>\n[\/vc_column_text][vc_custom_heading text=”How Custom is Your Home?” font_container=”tag:h3|text_align:left|color:%231a4b9a|line_height:1.1″ use_theme_fonts=”yes”][vc_column_text]\n

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If your home is a home with vinyl flooring instead of tile, formica countertops instead of granite, and not much molding or custom wood work, you can probably insure your home for less. If, on the other hand, you have hardwood floors instead of tile, upgraded appliances and fixtures, and quite a bit of custom wood molding, your home should probably be insured for much more.<\/p>\n<\/div>\n[\/vc_column_text][vc_custom_heading text=”Where is Your Home?” font_container=”tag:h3|text_align:left|color:%231a4b9a|line_height:1.1″ use_theme_fonts=”yes”][vc_column_text]\n

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Where your home is built matters for two critical reasons. First, if you are in an area that is remote or more difficult to get to, construction costs are typically much higher. Second, construction costs vary greatly depending on the part of the country you are in. Construction prices in Texas can be very different from construction prices in Los Angeles, California, for example.<\/p>\n<\/div>\n[\/vc_column_text][vc_custom_heading text=”What is the Value of Your Land?” font_container=”tag:h3|text_align:left|color:%231a4b9a|line_height:1.1″ use_theme_fonts=”yes”][vc_column_text]\n

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Land is never insured with homeowners insurance, and thus should not be considered when coming up with the amount of coverage necessary for your home. It is important to remember, however, that debris removal needs to be included in your replacement cost.<\/p>\n<\/div>\n[\/vc_column_text][vc_custom_heading text=”Replacement Cost is Not Real Estate Driven” font_container=”tag:h2|text_align:left|color:%231a4b9a|line_height:1.1″ use_theme_fonts=”yes”][vc_column_text]\n

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In real estate, prices can rapidly go up and down. Most insurance companies thus don’t base replacement cost and the right amount of home insurance on current market values, but rather construction costs.<\/p>\n

If you have your home insured for $200,000 and because of a real estate crisis your home is now only worth $100,000, it may not be in your best interest to immediately try to lower your coverage to the current sales market value.<\/p>\n<\/div>\n[\/vc_column_text][vc_custom_heading text=”What if a Company Wants More Insurance?” font_container=”tag:h2|text_align:left|color:%231a4b9a|line_height:1.1″ use_theme_fonts=”yes”][vc_column_text]\n

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You may insist that your home could be rebuilt for $85 per square foot, but if most companies are coming back insuring your home for over $100 per square foot, it is always in your best interest to err on the side of too much coverage rather than too little.<\/p>\n

If after explaining to an agent you believe the home should only be insured for a certain amount, and the agent still insists replacement cost is much higher or lower than you would like, it’s probably best to accept the amount that the agent deems necessary. If it still really bothers you, contact other companies for second and third opinions, or look elsewhere for insurance. But make sure that the amount of coverage you get is replacement cost<\/a>, or you may be sorry when trouble strikes.<\/p>\n<\/div>\n[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column]\n\t\t\t

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