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| Insurance Tips |
RICCI & ASSOCIATES
INSURANCE SERVICES
INSURANCE SERVICES
| We spend the time to SAVE YOU MONEY! |
Jan-Feb 2012
[These tips are not legal opinions and
should not be relied upon as such.The
intent of this article is to provide general
background on topics of interest
discussed, not to provide legal advice.
Please contact your agent in regards to
situations or specific questions
regarding the topic or topics covered.]
should not be relied upon as such.The
intent of this article is to provide general
background on topics of interest
discussed, not to provide legal advice.
Please contact your agent in regards to
situations or specific questions
regarding the topic or topics covered.]
Replacement Cost vs. Market Value |
For example:
A home purchased in a depressed neighborhood maybe have a market value of $120,000 but the
same house located in a nicer suburb may have a market value of $285,000. However, the cost to
rebuild both of these homes would remain virtually the same at either location. Insurance companies
are only concerned with insuring the home at the full replacement value and not the current market
value since the market is variable and fluctuates. One thing to remember is that you are not insuring
the land and this will be excluded from the replacement cost valuation.
Make sure to consult with your agent if you have any concerns about your coverage. Your agent also
should be aware of any major renovations, alterations or improvements you may have done to your
home, i.e. adding a bathroom, central air or even upgrading your kitchen. This information may play a
role in factoring your replacement cost.
There are different methods in determining
the value of a house.
1. Market Value: the price paid for your house
2. Replacement Cost: the price or cost it will
take to rebuild your home in the same
location, size, and quality of construction at
today's costs. The replacement cost will also
take into consideration the debris removal
that must take place at the time of a loss.
Most consumers are unaware that the market
value of your home and the replacement cost
can be two completely different numbers.
the value of a house.
1. Market Value: the price paid for your house
2. Replacement Cost: the price or cost it will
take to rebuild your home in the same
location, size, and quality of construction at
today's costs. The replacement cost will also
take into consideration the debris removal
that must take place at the time of a loss.
Most consumers are unaware that the market
value of your home and the replacement cost
can be two completely different numbers.
