Anchor Insurance Blog

As you plan your next big move, be sure to consider your insurance needs.

Posted by Anchor Insurance on Jan 18, 2017 8:18:57 AM

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The New Year is upon us and for most people it’s a time for setting goals…to be healthier, take a vaction, or save for that dream kitchen. As you make your exciting plans for the new year, remember to consider your insurance needs, especially if you’re thinking of remodeling your home, buying a new home or making other major purchases. As your situation changes, you’ll most likely need to update your insurance coverage so you’re always “insured to value.”

At Anchor, we always recommend insuring your home 100% to Value. Why? Because it is extremely important that you have enough insurance to cover your entire home and its contents, not just a portion of it. But what exactly is your home's value? Let’s dig into the specifics...

Market Value vs. Insurance to Value (ITV)

So what is the difference between “Market Value” and ITV? 

Market Value of a property includes things like:

  • Value of the land with the property. For example, if your home is located on a high value waterfront lot, this could drastically increase market value, but not necessarily your home's insurable value;
  • Location of the property;
  • Current Economic Conditions;
  • School Districts within the taxable area; and
  • Other Factors

A realtor can usually give you an estimate of the market value of your home based on his/her expertise; however, an insurance agent is better equipped to provide an estimate on the amount of insurance you need to fully protect the property.

ITV includes many things, such as:

  • The cost to rebuild the home from the ground up in the event of an entire loss;
  • The cost to remove any debris or rubble in the event of loss;
  • Interior structures like cabinets, countertops, flooring, etc.
  • Personal property such as furniture, appliances and clothing.

It’s also important to remember that there is a cost difference between rebuilding your home and buying your same home of like kind and quality. Think about it, if you’ve ever watched HGTV, or done your own renovations, you know that when rebuilding you can run into all types of unknown issues that drive expenses up.

Get an Estimate

Anchor agents have sophisticated software to assist you in determining the insurable value of your home.  The software is updated with the latest material costs for your area down to the screws and nails. By answering a few questions about your home such as the square footage, number of rooms, doors and windows, roof type and construction type, you can get a general estimate of your homes insurable value. The more details you provide about your home, the more accurate the estimate will be.

Personal Property

Most homeowner's policies will include coverage for your Personal Property at a percentage of your home's determined value. This includes all of the interior contents of your home that are not part of the structure. A good rule of thumb…if you don’t have to detach it to get it out of your house, it’s part of your contents. For example: Your dining room table and chairs are part of your personal property; your built-in entertainment center is part of your dwelling.

We recommend taking an inventory of your personal property and keeping an itemized list somewhere safe. Keep receipts for big purchases with this list with descriptions and item costs when it was new. The Insurance Information Institute offers a free online home inventory guide to make the process easy for you.  If you find the total amount of your personal property to exceed your “Personal Property” limit on your insurance policy, talk to your agent about scheduling some items or increasing personal property coverage.

Policy Review

The new year is a good time to re-evaluate the value of your home, especially if you’ve made updates (new kitchen, bathroom, swimming pool, etc.)  Also if the holidays were good to you (new appliances, Ultra 4K Big Screen, Diamonds, etc) consider Equipment Breakdown coverage or scheduling your personal property.  Talk to your agent to make sure you have everything covered, or schedule a policy review at your next renewal to go over your coverages. 

Stability When You Need It

You can rely on Anchor Insurance for stability when you need a little (or a lot) of help. Our swift claims response and warm customer care will provide you reassurance in unsteady times. Rest easy knowing you and your home are protected by a solid insurance company that can stand the test of time.

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Topics: Home Safety, Homeowners Insurance, Insurance Tips

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