Hi, I’m Lindsay Sarff and I’m here to answer a question you may have wondered about regarding your home insurance. A common question many homeowners have is, how much is my home worth? Well, depending on the type of valuation done on your home, the value may differ significantly. A real estate appraisal of your home, for example, is typically conducted by a professional real estate appraiser and is based on variables such as the current economy at the time, similar property values in the area, the age and condition of your home, the type of materials inside, and numerous other factors. Appraisals also typically include the value of your home plus the land it sits on.
Insurance companies value your home a little differently. They look at its value in terms of its actual replacement cost, meaning, what would it cost to rebuild your home in the event of a total loss? This type of valuation is based on factors such as cost of labor, materials, and other requirements needed to put your home back to the way it was before the damage occurred. This replacement cost calculation is the amount at a minimum you want to make sure your home is insured for. Once again, homeowners policies do not provide coverage for land, something that is included on an appraisal of your home. So it’s not uncommon to see differences in your homes value when you compare a real estate appraisal to a replacement cost calculation. As always, speaking directly with us will help clarify how these valuations affect your homeowners policy and premium.

Call Warren Insurance Group in Fayetteville NC at (910) 323-2588