Quite often I am asked, “Why is the insurance value different than the market value of my home?” In most circumstances your property insurance policy should have replacement cost coverage, that states, if there is a loss, you would have your property replace with new, like, kind and quality.
Replacement Cost coverage does not take into account the age of the home our building, rather is accounts for cost to rebuild or replace new.
A common example I cite with others when we meet to discuss their property insurance is if your 20 year old home suffers a total loss due to a fire, and you have replacement cost coverage, we would pay for a new home, the same size and same characteristics of your current home. You get new for old. The cost to rebuild your home new, in most cases, is higher than what you purchased the property for.
The replacement value should also include the cost of debris removal as this can be as much as 25% of the value of the building and also includes applicable taxes and fees to rebuild.
Understanding your policy and knowing your property insurance coverage are just a few ways you can ensure you are properly protected.
Ideally having a proactive Insurance Agent, that is invested in you and your family will result in you getting the coverage and advice you deserve.
We have been insuring home in the London and Strathroy region for over 150 years. It pays to shop and insure locally.
Reach out to your Local Mutual Insurance Agent or Contact your Insurance Broker to receive a quote for your Property Insurance with a Local Mutual Insurance Company.
As London and Strathroy’s Most Reviewed Insurance Agent, my goal is to provide you with the service, rate and coverage you deserve!
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