What type of coverage do you need?

For many of us, our home is a place of comfort and joy. Home is where the hearts is. It’s where we raise our families. It’s the place we spend hours decorating to make it our own. Oftentimes, it’s also one of the biggest investments we make, and one we want and need to protect.

Over time, a homeowner may make changes to their home. Refinish a basement. Customize a kitchen or bathroom. Install a window. In addition, the effects of the economy and inflation cause the replacement value of your home to change over time. These changes add value to a home and directly impact the amount of insurance needed to fully protect your home.

Is there a difference between the selling price of my home and the amount of insurance I need?

The selling price, or market value, of a home is determined by factors such as the age and size of the house, its physical condition and location and the cost of the land. When insurers calculate the replacement value of your home, some of these same factors, like the age and size of the house, are used for determining both the market value and replacement cost. In some instances, the market value of your home represents just one-half or one-third of the cost to rebuild. The amount of insurance you need to carry on your home is best represented by the replacement cost and not market value.

According to Marshall and Swift, a leading provider of building cost data, in the past year, home values declined more than 4% nationally, but overall construction costs rose 1.3% from January 2009 to January 2010.

New homebuilders often realize great savings in the mass purchasing of building materials. Contractors may be building many houses at the same time and can purchase materials in bulk. Not so for the reconstruction contractor! Materials for the job are unique and now specific to the home and, therefore, are usually more expensive due to the lack of mass purchasing power.

What can I do to make sure I’m insured adequately?

To keep pace with the rising construction costs, we recommend the following:

  • a replacement-cost estimate for your home every three to five years.
  • if you’ve remodeled or made improvements to your home, be sure to contact us.

When a loss occurs, your family experiences devastation. During this time you don’t want the additional financial responsibility that may result if you are not adequately insured.

For more information about homeowners insurance please visit The Weimer Group website or give us a call – we would love to review your home insurance value.*

*applies to PA homeowners.

Posted 4:39 PM

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