Why is the market value of my home different from the amount of insurance I have?
While the current market value of your home may be lower than you’d like, the cost to rebuild may be higher than you think…
Here are some helpful tips to keep your home insurance up to date as you make changes to your home over time.
- Nearly 50% of homeowners believe that their coverage amount is linked to market value.1 In fact, one has nothing to do with the other (see FAQs on home replacement costs). Insurance coverage is linked to the cost of rebuilding your home, and this cost can often be more than your home’s market value or selling price.
- Updates, additions and improvements to your home may increase the amount of coverage you need.
- Most common changes like installing hardwood floors, updating a kitchen or bath, or adding a deck affect the cost to rebuild your house.
At Ellis Insurance, we offer insurance portfolios that adjust the Dwelling A coverage amount each year to account for changes in the cost of labor and materials. Remember, however, that such adjustments don’t include any changes or additions made to your home.
“Did you know that over 60% of homes don’t have the right amount of insurance coverage and, on average, are “underinsured” by 22%? For a home that may cost $1MM to rebuild, this could mean $200k out of the homeowner’s own pocket!”2
What you can do:
- Request an Insurance Tune-upsm from Ellis Insurance each year to be sure your coverage reflects the cost to rebuild your home if it is damaged by fire or another covered cause of loss.
- Inform your agent promptly of any home improvements.
Not sure what coverage options are right for you? Contact us for more information on homeowner’s insurance, a quotation, or an Insurance Tune-up(SM) on your existing insurance.