When it comes time to renew your home insurance policy, take a good look at what your home is covered for and how much of your policy is actually going towards the value of your structure. The value of a home is not necessarily the cost associated with how much you could get for the home if you sold it today. And your home insurance policy may or may not cover the actual land value of your home. As you consider each component of your policy, consider how much of that value is accurate.
The biggest question to ask yourself is about the amount of home insurance required. Generally, you'll want to consider the amount of coverage you have and whether or not it covers the structure of your home, the cost of your personal possessions, liability coverage and the cost of any additional living expenses you may need to have if you cannot live in your home. But should it cover the actual land?
A mistake many homeowners make when purchasing home insurance is factoring in the value of their land into the value of home insurance. The fact is that the value of your land isn't likely to change no matter if there is a fire or a flood. In other words, there is no loss to be had in most cases. For this reason, you do not need to add in the value of your land when considering the value of your home for insurance purposes.
A key mistake that many also make is not factoring in the value of rebuilding the property. When considering how much home insurance to purchase, you may be tempted to simply cover the value of your home based on its market value. However, rebuilding that home after a fire can cost much more, especially when you factor in costs associated with the construction process.
It is a good idea to look over your home insurance policy carefully to ensure it is accurate and detailed enough. It is important to cover the cost of protecting the value of your home including rebuilding the structure, but the land value isn't likely to be an important component of this coverage.
Do you have the right protections? Call Floss Agency at (716) 688-5115 for more information on Buffalo home insurance.