$$ Home Market ValueVS Relpacement Cost $$
When it comes to your Homeowners insurance coverage, it is VERY important to know the difference between The Replacement Cost and The Market Value.
Your home's Replacement Cost should be determined by the CURRENT construction prices. If you need assistance determining this, you can speak with your Insurance Broker or contact a building contractor for an estimate. There is no guarantee that the estimate is 100% accurate, but it will help you determine an approximate amount.
Your Home should be insured for at least 100% of its estimated replacement cost.
It is suggested that the homeowners insurance purchased is at least equal to the replacement cost. No one can predict what it may cost to repelace your home in the future, but it's very important to make sure you are covered for any unforeseen circumstances.
The Homes Value VS Replacement Cost
The Market Value of the home, the purchase price of the home, the cost of the land or the outstanding amount of all mortgage loans ARE NOT Replacement Cost.
Replacement Cost for insuring your home is to determine how much it would cost to rebuild and/or replace the entire home.
Important Things To Consider
Review your Policy each year to ensure that you have enough coverage as well as the proper coverage.
Upgraded bathrooms, kitchens, new cabinets, custom moldings/trim work, special windows, finished/partially finished basements, added rooms, added living space, any other special feature and any economic changes, can change the estimated replacement cost you originally had. If you feel your original estimate is outdated, it is important that you speak with your Insurance Broker.
There is no guarantee of future costs or if the coverage is 100% accurate, but speaking with your Insurance Agent can help you determine what's right for you. These statements are to provide you with tips and opinions. Please verify all information with your Insurance Broker.
Comments(3)