What Is Your Home Really Worth?

While many homeowners are generally familiar with real estate values, they often are clueless about how much it would cost to rebuild their home should it be destroyed by a fire or other catastrophic event. Depending on craftsmanship, custom and historic features, and materials, the cost of replacing a home can be much higher or lower than a home’s market value. Knowing the difference between market value and replacement cost value can help you determine the proper amount of homeowner’s insurance to purchase.

Take this quiz to help make sure you are adequately protected in the event of a total loss to your home.

Step 1
  1. Do you insure your home based solely on the requirements of your mortgage company or another lender?

  2. Do you insure your home based on its potential selling price?

  3. Do you consider the impact of local labor and material costs in determining your insurance coverage?

Step 2
  1. Would you think to factor in current building codes?

  2. If your home were to have any custom or historic features, would you know their replacement costs?

  3. Are you certain that your homeowner’s insurance would pay for the full cost of reconstruction, regardless of your insurance limit, in the event of a total loss?


Step 3
  1. In a weak real estate market, should your homeowner’s insurance premium be lowered to reflect your home’s reduced market value?

  2. Has your insurer or another appraiser performed a replacement cost appraisal for your home in the last three to five years?

  3. Do you, or would you, report remodeling projects, renovations or additions to your insurance company?

  4. Do you know the insurance limit in your homeowner’s insurance policy?

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