People are often under-insured for the correct value of their home, business, and/or farm buildings, particularly when they choose a specific limit of insurance on their policy. Too often, the problem only becomes clear when they go to file a claim.
For example, if your home, business, or farm building burns down, you may not have enough coverage on your policy to rebuild it. Even though that building is listed on your policy, the correct value of the building may not be – and your limit of insurance may not be high enough to pay to rebuild it, based on today’s costs. Your insurance adjuster will also need to account for the cost of clean-up and debris removal, as well as re-landscaping your property.
When thinking about insurance, you need to consider two things: how much it would cost to fix or rebuild your building, and how does that compare to the insured value and policy limits you choose?
Keep in mind that real estate or market value – how much you could sell your home or business for in the current market – isn’t the same as insured value. Insured value is how much it would cost to rebuild it. Your insurance broker can help you determine that value.
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