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Home belongingsHome insurance provides significant financial protection for property owners. The value of the policy must match the value of the home. When updating insurance policies, be sure the value of the plan you have fits the value of your home. Here is how to make that happen.

#1: Know the difference between replacement costs and market value

Market value describes the home's value if sold on the real estate market today. It is what someone would pay to buy your home. Replacement cost is the value of the home to rebuild it. This type of value is usually higher than the market value. It includes the cost to pay laborers, clear debris, and cover the construction process.

Replacement cost coverage is often best. It helps protect your financials should a home loss occur. When an insurance company totals the home, you may need this coverage to rebuild.

#2: Talk to your agent about replacement costs

Your home insurance agent can estimate the replacement cost value of the home. They may this based on previous claims for homes like your own in the area. How much did the agency pay out for other homes in the area? This is a good starting point.

#3: Talk to a local builder or contractor

Still, homeowners should get a hard number from a local contractor. Meet with a local builder. Ask for an estimate. Many do this for a small fee. They provide the best guess to the value of the home from a rebuild perspective. These professionals know the market better than anyone else.

#4: Estimate the worth of your belongings

Home insurance covers the contents of your home. It is generally 10 percent of the value of your policy. For example, if your home's coverage is for $200,000, it would provide up to $20,000 to recover (or replace) your belongings. Look around your home. Is that enough? Add up the value of your assets to know.

#5: Don't forget other assets

Garages, barns, sheds, and even landscaping are valuable. Be sure your home insurance reflects their value. Take the time to add this cost to your home's overall value.

Increase your home insurance to cover the total value of your home. Update this number every few years. Ensure you understand what it takes to rebuild your home. And, work with your insurance agent to get the home's value just right.

If you need Oklahoma City home insurance, look no further. Call ECI Agency Inc. at (405) 373-2977 for a fast, free policy quote.

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NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
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Please note that we cannot bind insurance via email, fax, or phone. Any quotes given are subject to underwriting guidelines by the respective insurance carriers. Any reference of coverage used are not intended to express legal opinion as to the nature of coverage, but rather just a brief generalization of coverages. Please read your policy for specific details of coverages.

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ECI Agency, Inc. | 325 Piedmont Rd N | P.O. BOX 600 | Piedmont, OK 73078 | Phone: (405) 373-2977 M-F 8am-5pm