Craig P Brown Insurance Blog

All You Ever Wanted to Know About Insurance

Is your home insured to its value?

Selecting the proper amount of coverage for your home is the single most important decision you can make with your homeowners policy. Without it, you may not have enough coverage to rebuild after a total loss.

What is insurance to value?

Insurance to value is the amount of coverage listed under ‘Coverage A’ or the 'Dwelling  coverage' on your policy declarations page. It is the amount required to completely reconstruct your home in the unfortunate event of complete destruction.

Why is insurance to value different than the value of my home?

A home’s market value reflects current economic conditions, taxes, school districts, the value of the land, location, and other factors that have nothing to do with the actual cost of rebuilding a home and replacing all of its contents. If you have insurance to value, you will have the proper amount of coverage to reconstruct your home.

Why is reconstruction more expensive than new construction?

New-home builders typically build many homes at once and bid out the jobs to receive the best pricing. Their business model is based on economies of scale. For example, they may purchase 20 bathtubs at once, securing a lower unit cost. Reconstruction cost for a single home is more expensive since there are no savings when buying just one replacement bathtub.

How can you get help?

Selecting the right ‘Coverage A’ amount is your responsibility. Sound like a big obligation? Don't worry. Our insurance companies have tools that estimate the costs to rebuild your home from the ground up. Like any estimation, this will not perfectly capture every item in your home, so you should use it as a starting point and add to it depending on your home’s features. We can provide you with helpful information to fine tune everything. 

Follow these tips to keep you on track

  • Work with us to provide detailed information at the time of purchase to be sure that you receive an accurate quote.
  • Ask us about additional coverage options that may be available.
  • Review your insurance to value calculation on a regular basis with our office.
  • Tell us about any changes or improvements that you make to your home, so that you can re-evaluate your coverage needs.