Now is the time to make sure your coverage is still adequate in light of decreasing home values and rising replacement costs for housing.
Often, homeowners are not aware that the amount of insurance coverage they need is actually greater than the initial amount of their mortgage—or their current property value. The insurance you buy for your home should be directly related to the cost of rebuilding it. This relationship, called insurance to value, or ITV, is especially important now since home values in general have decreased, while the cost of replacing, rebuilding, or demolishing existing properties have risen.
While some insurance policies will guarantee replacement coverage, make sure you know whether yours is guaranteed or if there is a limit in your policy as to how much the insurer will pay. Losing your home in a catastrophic event is something no one wants to experience. However, making sure your dwelling is adequately protected is your best defense against such unfortunate and unforeseen situations.
Do you have questions about your homeowners insurance coverage? We’re here to help! If you’d like to discuss your policy, please contact us online with questions, or call one of our local insurance agencies:
Ann Arbor: 734.971.1000