In recent years, we’ve seen dramatic changes in the real estate market, affecting home values significantly. If you purchased homeowners insurance years ago, there’s a high chance your home’s value has changed since then. This post discusses why it’s essential to update your home’s value on your insurance policy and how it can protect you financially.
Understanding Home Value Changes: The value of your home can fluctuate due to various factors, including market trends, home improvements, and changes in your neighborhood. If your insurance policy’s home value hasn’t been updated, you might be underinsured. This means in the event of a loss, you may not receive enough compensation to cover the current value of your home or to rebuild it to its former state. Do you want to know your home value?
The Risks of Underinsurance: Underinsurance can lead to significant financial strain. For instance, if your home is insured for $200,000 but has appreciated to $300,000, you’ll be left with a $100,000 shortfall in case of a total loss. This gap could be detrimental, especially if you’re not financially prepared to cover it out of pocket.
How to Update Your Home’s Value:
- Conduct a Home Appraisal: Hiring a professional appraiser is the most accurate way to determine your home’s current market value.
- Review Home Improvements: If you’ve made significant renovations, ensure these are reflected in your home’s insured value.
- Consult with Your Insurance Agent: They can guide you on how best to adjust your policy to reflect your home’s current value.
- Regular Check-ins: Make it a habit to review and update your home’s value every few years or after significant market shifts.
Benefits of Keeping Your Insurance Updated:
- Adequate Coverage: Ensures you have enough coverage to rebuild or repair your home in case of damage.
- Peace of Mind: Knowing you’re fully protected can provide immense relief.
- Avoiding Disputes: Accurate home values can prevent disputes with insurance companies during claims.
As a homeowner, it’s crucial to keep pace with the changing value of your property. Updating your home’s value on your insurance policy not only offers peace of mind but also ensures you’re adequately covered in the event of unforeseen circumstances. Regularly reviewing and updating your insurance can save you from potential financial hardship and make sure your investment is always protected.
Check your current policy and consider if it’s time for an update. Your future self will thank you!
If you are not sure what the value of your home is, we would be happy to provide you with a free comprehensive home evaluation. Just give us a call at 207-477-7344. Or you can easily use our quick online home evaluator by clicking here.