Understanding the Value of Your Home

Understand the difference between market value and replacement cost.  “Replacement cost” is the amount needed to repair the damage or to rebuild the home to its pre-loss condition. For insurance purposes, the replacement cost of a home is NOT the market value of the home, its purchase price or the outstanding amount of any mortgage loan. It does not include the value of the land, but is the cost of rebuilding your home.

Some important things to consider when determining your coverage amount:

  • Your home’s estimated replacement cost is different than its market value (real estate cost).
  • Each time you remodel or improve your home, you should adjust your coverage amount accordingly.
  • If your home is made of unique building materials, make sure they are reflected in your replacement cost estimate.
  • Stay abreast of the fluctuating building costs in your area and update your coverage amount accordingly. Make sure that you maintain coverage at 100% of your home’s estimated replacement cost at all times.
  • It is important to review your coverage annually and inform us of any changes you’d like to make.

*  The coverage information outlined herein is a guideline only; refer to the actual policies for full terms, conditions, exclusions, and limitations

We can help you make the right choices of coverage and the right insurance carriers for the protection of you and your family. Discuss with us, other riders, amendments and credits that can be added to customize your Homeowners Insurance policy.

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For information regarding Homeowners Insurance or other coverages that may not be listed, email us at info@mackoul.com

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