Insuring Your Home to Value

Market Value vs. Reconstruction Cost
Because the cost to rebuild is often much higher than what you paid for your home, we do not rely on market value to determine what level of coverage you need. There are many variables that affect reconstruction cost as well as market value, so the only way to ensure your home is protected is to provide accurate, up-to-date information to your agent. Market value is affected by the local housing market in your area, housing shortages, the number of new homes being built near you, and your location. Market values fluctuate constantly and are not a reliable source for replacement costs. For example, the average home sales price increased by 73.76% in Phoenixville, PA, while the average home sales price in Waldport, OR decreased by 35.4% during the same period.

Reconstruction cost is independent of market value, and is affected by things like the expense and availability of labor and materials, fuel costs, special characteristics within the home and even how easy it is to access the house site. Because of these factors, the reconstruction cost of your home may be much higher or lower than the current
market value.
The Reconstruction Valuation Process
When you buy your policy through your independent agent, he or she will take the time to collect information about your home’s characteristics, including any custom or vintage features, total living space, building materials and other important details that helps us understand what is being insured – and what might need to be rebuilt in the event of a loss. This information is used to calculate the cost to rebuild a home based on its unique characteristics. Your
agent then obtains a quote for your policy premium based on this information.
Reconstruction Appraisals – A Higher Level of Service
Certain homes may fall outside the “normal” valuation models, and in these cases, Insurance Companies contract  with
professional reconstruction appraisers who will come to your property to perform an exterior and, in some cases, an interior reconstruction appraisal. This additional level of service helps ensure that your agent has captured all of the pertinent information we’ll need to provide you with the right level of coverage. These appraisals are a critical part of insuring your home to its reconstruction value, especially when you have unique, custom or unusual home features that may not fall into a standard valuation calculator.
What to Expect
Once you purchase your homeowners policy, most carriers do an exterior inspection. Because this is an exterior inspection, you do not need to be home to meet the appraiser. If your home requires an interior inspection, you’ll be
contacted by phone to schedule a time that is convenient for both you and our appraisal company. You will need to be present for this visit, because the reconstruction appraiser will be examining the interior of your home. The appraiser will spend approximately 90 minutes in your home carefully examining construction features, finishes, square footage and other information that will provide an accurate reconstruction cost estimate.
After the Inspection
Once the Insurance company receives the inspection report, they’ll determine whether the initial coverage estimate is still accurate, or if it needs to be increased or decreased. If changes need to be made, the company will  contact your agent who can then go over the details with you, including how your premium may be affected.

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