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Why Do I Need to Insure My Home for More Than It’s Worth?

You may have noticed that your covered for more than it’s worth, know that this is not a mistake!

The market value of your home located in Beaverton Oregon, Portland Oregon or elsewhere may have risen or dropped, but that doesn’t mean that your insurance should follow suit. A homeowners insurance policy is a contract designed to repair or even entirely replace a home should it be damaged or destroyed by a covered cause of loss. This is because it often costs more to replace a home than it does to start from scratch with a vacant piece of land. This makes it necessary to carefully choose an amount of coverage that is sufficient to replace the home should it be destroyed.

Many factors affect the market value (i.e. selling price) of a home. These factors can include the age of a home, the condition, location (location, and location), and the overall economy that may determine what a buyer is willing to pay for it. The cost to replace a home is based on the cost of labor and materials to remove the remnants of the old home and rebuild the home the way it was before the loss occurred.

Let’s say the cost to replace a home is $250,000. That means that the market value of this home could be one amount for the home if it was situated in an urban lot, another cost if it was located in a moderately-sized suburban lot, or if it was in a 10 acre lot in some rural place.

It’s important that you speak to your homeowners insurance agent to make sure that you get the right amount of coverage for your uniquely situated home. Talk to your Fox Insurance independent insurance agency specialists to determine your need for homeowners insurance and the best fitting insurance policy for you! Contact Fox Insurance Agency for a quality and reliable home insurance and auto insurance in Beaverton, Oregon or Portland Oregon policy!