Who Decides How Much is My Property Worth? 

Becoming a homeowner may be one of the most significant milestones in your life and knowing your property worth is very important. Purchasing a residence of your own can provide you and your family with ongoing security, stability and safety. However, doing so may also represent one of the most expensive purchases you ever make, meaning appropriate insurance is necessary.

Still, knowing exactly how your home is valued and what factors may contribute to its insurance costs and needs can be complicated. Fortunately, with the help of a qualified insurance agency, such as Affiliated Agency of Ocala, you can ensure a comprehensive understanding of this process, which may help you retain appropriate coverage at ideal rates.

How Insurance Companies Assess Your Home’s Value

As you shop around for appropriate homeowners insurance, carriers must be diligent in assessing your home’s value. In most cases, insurers offer the following coverage options within homeowners insurance policies:

• Replacement value coverage—This approach to covering your home may incur higher premiums while offering more robust financial protection. Replacement value coverage can mean you may receive a payout up to the cost of fully rebuilding your home after a total loss. As such, your insurance company often agrees to render financial aid in excess of what you originally paid for your home, as depreciation is not considered.
• Actual cash value—If your homeowners insurance policy includes actual cash value coverage, you may enjoy reduced costs in exchange for lower maximum payouts. This is because an actual cash value clause accounts for depreciated values regarding your home. For example, if your home’s insured possessions or structural components are nearing the ends of their anticipated lifespans, your insurance typically will not provide full value to replace them.

Factors Affecting the Value of Your Home

As insurance carriers weigh your unique circumstances and provide quotes for appropriate coverage, they may consider a multitude of criteria, including the following:

• Recent sale prices of similar properties in your area
• Location details, such as the quality of nearby schools, local crime rates and proximity to various attractions
• Physical details, such as age, building materials, renovations and interior layout
• Lot size
• Value of insured contents

You should also be aware that insuring the contents of your home may require appraisals from other parties with relevant expertise, and standard homeowners policies may not have sufficient limits for particularly valuable items, such as jewelry and fine art.

Get the Right Coverage

Insurance carriers must work diligently to assess your risk levels before being able to quote you an accurate price for adequate homeowners coverage. Working with a knowledgeable and experienced insurance professional, such as those at Affiliated Agency of Ocala can make this process easier. Having served the Ocala area for over 30 years, we are well-equipped to guide you through securing optimal coverage for your home while fully understanding your policy and the process as a whole. Contact us today to learn more.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.