Market Value vs. Replacement Cost
When deciding how much insurance you need to cover your home, think
replacement cost rather than market value.
Most people tend to think about the market value, which is the selling
price of your home. This value goes up or down based on the economy,
the supply and demand for homes in your neighborhood, local employment
levels and other factors. Replacement cost, on the other hand, is
the amount it would take to rebuild your home at today's prices.
If your home suffered devastating damage you want enough insurance
to pay the cost to rebuild. Make sure your home and personal property
are adequately covered. It is important to have your insurance agent
help you estimate how much coverage you'd need to actually replace
your home and cover your personal property.
The amount of your mortgage balance is totally irrelevant
to the amount of homeowner guaranteed replacement cost insurance
you should carry. In many states, over insuring for more than replacement
cost is illegal-because over insurance encourages arson. Be sure
your guaranteed replacement cost policy includes a building code
endorsement. That means the rebuilt home will be constructed to
today's building codes, not the codes in force when your home was
Start with a guaranteed replacement cost insurance
Raise your deductible to $500 or $1,000 for each loss.
Compare policy costs with several insurance agents.
Consider whether you need depreciated or full replacement cost personal
Review your liability coverage to see if an umbrella policy will
give you better protection at lower cost.
Insurance Hard to Get
Obtaining homeowners insurance in Florida has in some cases become
an inconvenience mainly due to past hurricanes and/or flooding in
the area and because state law forces the company to offer flood
insurance. A few areas the consumer may find it hard to get coverage
include: sales in beachfront/island areas or near flood zones and
Take Inventory Now
Imagine coming home some night and finding your home burglarized,
vandalized or burned. Would you remember all the items missing or
destroyed, and their value?
Keep Accurate Records of Your Household
- Make a list of items in each room as you move in.
- Write down serial numbers if they have them.
- Take photos or video's of items in each room.
- Put the owner's manuals of items you purchase along with their
- Keep in a safe storage spot.
Burglary Prevention Tips
- Put up a Beware of Dog sign.
- Give your home a lived-in look.
- Keep garage doors closed and locked.
- Leave a radio on. It signals that someone is home.
- Trim shrubs around doors and windows so that anyone can be seen
- Set inexpensive timers to turn on lights in different rooms at
- Leave shades and drapes open. If closed, it's a sign you're gone.
- Place lamps close to windows to obscure a view inside.
- Install outside lighting that is activated by motion.
- Join or start a neighborhood watch program.
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