4 Pitfalls To Avoid When Valuing Your Home

For many people, their home is the biggest investment they will ever make. Homeowners insurance is an important part of protecting that investment. If something catastrophic were to happen to your home, you’d likely look to your insurance company to help you rebuild. However, if you don’t have your home properly insured, you might be left making up the difference. 

Unfortunately, according to CoreLogic's Residential Cost Handbook nearly 64% of homeowners do not have enough insurance, and in some cases is up to 60% underinsured.

To help you before it is too late, we want to share some common mistakes we have seen when valuing a home’s replacement cost:

• Assuming the price you paid is the amount you’d pay to rebuild after a total loss. The purchase price includes the property and land the home is built on, whereas the land is not a factor in the cost to rebuild. 
• Not accounting for renovations made. The quality of the materials in your home matters when it comes to rebuilding and replacing what you had. Consider all those details when determining your coverage needs.
• Not factoring in cost of materials and labor, which can change based on other circumstances, like a natural disaster. While you can’t possibly know if something will cause the construction costs to increase, it is important to understand if or how that might be built into your policy.
• Underinsuring your home. It can be easy to underinsure your home as noted above, but some do it intentionally to save money. It is not worth risking proper coverage!

Work with an insurance professional to be sure you are adequately covered. Get Acuity’s Guaranteed Replacement cost coverage today!