If the value of my home goes up, do I need to increase my coverage?
We bought our home several years ago before the most recent housing boom. Now, like everyone in the country, the home prices in our area are going through the roof! We haven't made any major additions to the home, but values in our area have increased significantly since we purchased. Do we need to increase our home insurance coverage to match the potential sales price of our house?
The value of your home increasing is amazing for selling purposes. However, when it comes to insuring a home, insurance carriers value the dwelling (Coverage A) at a replacement cost. This means they will cover the actual amount to rebuild your home, in the event a covered peril leads to a need to repair or rebuild.
Since the cost to rebuild the home doesn't include the value of land or the amount you could get for the property if you sold it, the replacement cost may well differ from the property value.
You may still note a rise in home insurance costs this year as the cost to replace your home can rise as a result of materials growing more expensive. For example, the cost of lumber jumped dramatically in 2020 and 2021, adding about $36,000 to the average cost to rebuild a home. Factors like this that are out of your control can impact your insurance rates, even if the rising home prices in your area do not.
If you have any concerns about your coverage or if you're getting the best rate for your home insurance, it's always great to compare your home policy with other carriers. Good luck and if you have any other questions, don't hesitate to ask. If you're looking for more information on home insurance, see our guide here.
Insurance is complicated, but it doesn't have to be.
The Zebra searches all of the top insurance companies, in one place, so you can compare the cost and coverage you need to protect your car, home and other property.
Step 1: Tell us a little about yourself
Choose an insurance product and enter your zip code to get started. No phone number required.
Step 2: Sip your coffee while we find the best quotes
Enter the necessary information and then sit back while we find quotes from 100 top insurance carriers.
Step 3: Compare your quotes
Compare quotes side-by-side to find the right match for you, whether it's home, auto, or more.
Step 4: Let our agents do the hard work for you
Once you pick your policy, our agents are here to get you over the finish line. Then just relax and enjoy your savings.