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Personal Perspective


By December 1, 2012No Comments

The two most commonly cited sources of a home’s value are usually useless for insurance purposes.

Most people base the perceived value of their home from a benchmark of the original purchase price, and then adjust it over time based on current home sales or tax assessments. However, even realtors will tell you that such values are educated “guesstimates,” subject to wide variation.

For example, “appraised value” is an estimate of the property’s worth in the current marketplace derived from an analysis of the home, the community, and the recent sales prices of similar homes in the area. The local taxing authority determines “assessed value” to levy property taxes. To confuse the issue further, state and local laws and regulations often require capping or discounting taxable assessments well below the full value assessed by the authority.

However, neither of these values might be practical for insurance purposes. If your home is severely damaged or destroyed, the true value you need will be the cost to rebuild it, not what it might sell for or its tax assessment. Too many people have made the mistake of relying on assessed or appraised values to determine if they have enough Homeowners insurance only to find, much to their chagrin, that their coverage fell far short of true construction costs.

Give us a call today; we’re ready to help you develop a solid estimate of your reconstruction costs.