You probably have an idea of your home’s market value. But do you know its insurance value? A home’s insurance value, also known as replacement cost, is the amount of money it would take to replace, or rebuild, your home in the event of a fire or other covered loss. Replacement cost has nothing to do with your home’s market value, land costs or any loans you have on your property. What do insurance companies look at when estimating your home’s replacement cost?
Here are some of the most important factors:
- Cost of construction in your area
- The size of your home
- The number of individual rooms and bathrooms
- The materials used in your roof
- Special features, such as fireplaces
- Recent improvements or additions
These are just some of the factors used to estimate the cost of rebuilding your property. Remember that replacement cost can change over time, so it’s always a good idea to come in or call for an annual insurance review! Have any questions about your replacement value or homeowner’s policy? Just give us a call. We would be glad to explain one of your family’s most important insurance policies.