🏡 With home values appreciating so quickly, it’s important to consider whether you should increase your home owners insurance coverage. 📈💰
In your case, with your home’s market value estimated to have risen by $250,000, it may be wise to reevaluate your insurance policy. 💼💡
Increasing your home owners insurance can provide you with better protection against potential risks and unforeseen events. 🛡️🔒
Here are a few factors to consider when deciding on your insurance coverage:
1️⃣ Market Value: Your home’s market value is a significant indicator of its worth, and it’s essential to update your coverage to match this appreciation. This way, you can ensure that your policy adequately reflects the potential costs of rebuilding or repairing your home in case of a covered incident. 💵💸
2️⃣ Replacement Cost: It’s vital to ensure that your insurance coverage reflects the current replacement cost of your home. This cost may differ from the market value, as it includes expenses associated with construction and materials. By increasing your coverage, you’ll have peace of mind, knowing that you won’t face significant out-of-pocket expenses if you need to rebuild. 🔨⚒️
3️⃣ Personal Belongings: Along with upgrading your coverage for the increased home value, reassessing the value of your personal belongings is equally crucial. Consider conducting a home inventory to identify any valuable items that may require additional coverage. 💼💍📺
While valuing your home accurately is crucial, it’s essential to work closely with a knowledgeable insurance professional who can guide you through the process. They can assess your specific situation, suggest appropriate coverage options, and provide you with a more accurate estimate of the premium increase. 📋📊
Remember, ensuring adequate insurance coverage for your home is about safeguarding your biggest investment and protecting your financial well-being. By staying on top of these updates, you can enjoy the peace of mind that comes with knowing you’re well-protected. 👍🏼🏠💼
You should increase your homeowners insurance if your *replacement cost* increases. This should be reevaluated annually regardless of home purchase values.
Your home’s market value, which includes the value of the land it sits upon (which is uninsurable btw) and the cost to rebuild are two completely separate things.
Have building materials and labor costs increased tremendously, affecting your home’s replacement cost ? Absolutely. Call your agent and have them re-run a cost guide for peace of mind (many agents have already been doing this the last couple of years at renewal).
Most insurers use databases and services to automatically adjust home values so they collect enough premium as well as do not under or over insure the structure. Dont confuse market value with replacement costs as you are looking at the structure not the land or any unique settings.
You want your coverage to cover a full house build. Can even add yard items such as sheds, patios, etc. Look into your area’s natural disasters too. Most insurance will force flood if you’re prone, etc. Same may not and it’s a good idea to read exactly what is and isn’t covered, what makes it a claimable cause aka burst pipe taking out a finished basement.
Also read into roofing clauses. If your roof has aged out, any damage from the old roof or any damage it incurs may not get claimed. Read into siding coverage too. The cheaper option usually means replacing sections with like materials and colors vs a more expensive option that would replace entire siding to match.
I personally did not insure yard items as by the time deductible hits, a claim being made, and possible insurance premiums going up; might as well eat the loss or pay the difference instead of going through insurance.
Your insurer should be upping the replacement cost annually. If not, make sure you ask them to check.
The other thing you want is for your liability insurance go be greater than or equal to the value of the house.
I have a rider on mine that adds a cushion on top , something like 50% above the coverage amount. I think it’s an extra $40 year or so. Totally worth it.
Ours just increases every year based on increasing projected replacement costs.
My insurer has never been shy about increasing my replacement cost coverage without any intervention from me.
Your bank may require it to account for higher construction costs. You don’t have to worry about land appreciation because you still have the land after a fire.