As we come to the end of the year, it is time to take into consideration any and all of the factors that have come into play regarding the value of your home, which in turn, could affect your home's insurance coverage.
First of all, Realtor.com has reported that the median listing price for houses have increased more than 10 percent. That rate could be even higher depending on particular neighborhoods. And because of housing demand, many offers have come in over the asking price of many homes. So just because of market pressure alone, your home could be worth much more than it is currently insured for.
Then there is the case where homeowners, ever since COVID, have spent time and money on housing repairs and adding improvements, ranging from replacing kitchen cabinets, adding another bedroom or sunroom or renovating baths. All of these improvement could increase the value of a home and change the value of insurance coverage.
Part of the key to understanding the need for adequate coverage comes with the understanding of market value versus replacement value of your home. Market value is what you could sell your home for in the current real estate market. Replacement value in an insurance policy means covering the cost of labor, materials and cleanup to rebuild your home if it is a total loss. The replacement value could easily be more than its market value.
While you are evaluating your finances and needs for the new year, consider contacting your J.P. Perry agent to help you determine if you need to make adjustments to your homeowners' coverage. Your home is too large of an investment and means too much to your family not to have adequate coverage.