Many things have two values, for example, your grandmother’s pearl necklace might be priceless to you – but if you decided you needed the money and tried to sell them – they might only be worth $100 to a buyer! Or you might have bought a painting at a rummage sale for $10 and find out later it was painted by Van Gogh and a buyer is willing to give you $10 million. It’s similar to insurance values.
Insurance companies don’t consider how much you paid for your house or what you feel it would bring in the open market, they consider how much it would cost to rebuild it. So they have a computer model that sorts the size of the house, the materials from which is it built, what year it was built (fashion changes in houses as well as clothing!) and any updates that have been made, including additions above ground and finished basements. And then they determine for YOUR house, what they believe it will require to rebuild it from the ground up. Insurance is designed to “make you whole” – that is, to put you back where you were before the loss.
The agent’s role in this is to ask all the necessary questions to find out everything about your house that will get this number as close to correct as possible. It wouldn’t be a good thing for you to be paying for more insurance than you need, but it also wouldn’t be a good thing to find out at the time of a loss that the insurance coverage wasn’t enough.
It’s important that you keep your agent up-to-date on any changes that you make. Whether it’s a new roof, a new sunroom, a new man cave, or a new kitchen with custom countertops, cabinetry, and appliances. Give us a call so we can make sure your coverage is just right for you!