What is the insurance value of my home?

Some of you may be asking yourself: "Does my insurance coverage fit my needs? Do I have enough coverage to replace my home in the event of a serious loss? What effects my premium?"

These questions create a need for you to regulary review your homeowners insurance and consider other questions such as: "Have you recently remodeled or improved your home?" "Has the rate of inflation risen since your last appraisal?" "What influences construction costs in your area?"

As you consider these issues, it is important to understand that real estate values measure the market value or selling price of your home. For insurance purposes, it is important to estimate the current replacement cost, which is the amount needed to hire a contractor to repair the damage or to rebuild your home if you experience a loss.

Building contractors or professional replacement cost appraisers are a good source for obtaining an estimated replacement cost for your home. Estimates from these sources should reflect your home's specific features and details. If you are unable to obtain a detailed estimate from these sources, your insurance agent can assist in determining the replacement cost.

Once you know the estimated cost to replace your home, you can decide how much insurance coverage fits your needs. You should also consider other policy endorsements such as back up of sewer and drain coverage, additional coverage for personal articles with high values such as jewelry, fine art and collectibles. You may also want to consider higher personal liability coverage or the need for flood insurance.

In addition to the amount of coverage you decide to purchase, your premium is impacted by optional endorsements you select, your claims history, the amount of your deductible, company longevity and multiple policy discounts such as home/auto.

Finally, remember to periodically review your insurance coverage with your agent. That will ensure you have the coverage you need.