Do you find yourself checking home prices on your favorite real estate app, even if you aren’t in the market to buy or sell? You’re not alone. Homeowners across the country are wondering how changing interest rates and market values will affect their lives–and their homeowners policies. Here's what to know. - Replacement Cost -A good Homeowners policy limit is based on cost to rebuild your home, not buy it. Market Value and Replacement cost are often times different figures. Our Replacement Cost estimates are imperfect, and are based on average cost per square foot in our area, as well as computer software programs-- and can vary greatly based on quality of construction and materials. On the very low end, we see $175 per sq foot, and $300 per sq foot on the high end, these do not include cost or value of land.
We like to add endorsements for either 125% of Limit, or Guaranteed Rebuild to give flexibility in the event of a large claim.
- Home Improvements - Upgrades and additions will change your Replacement Cost. Always call us when contemplating a new project, or if you have recently completed one.
- Actual Cash Value Policies - For many Rental/Landlord properties where the Market Value is drastically less than Replacement Cost, you have the option to not insure at Replacement Cost, but instead insure at your purchase price, or the Actual Cash Value. A major difference in an ACV policy is that Depreciation is applied to the valuation of a partial loss claim, and typically will result in a 20-40% smaller claim check for Repair Claims. If it's a total loss fire, the policy limit, or the Actual Cash Value amount would be paid. These policies are not always less expensive than the superior Replacement Cost policy, and are advised in only certain situations.
If you’re not sure whether your home is correctly valued for your coverage, it might be a great time for a quick review so we can explain exactly how we keep you covered.
Give us a call! 518-374-8453 Ben Sequeira |
