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Why is my insured value different than my appraisal?
Your property’s appraised value includes the cost of your land and factors in how much homes are selling for in your neighborhood. The insured value is the cost to rebuild or replace your home.
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Do I have to increase my policy limits?
Some insurance companies require you to insure at least 80% of the cost to rebuild your home. If you have a home loan, your mortgage company will probably require you to have enough insurance to pay off your loan in case of a disaster.
If you have the option to insure your property for a lower value, think about how you’d pay the difference if your home was destroyed or damaged. Most insurers will pay claim payments based on the amount of coverage you have.
For example, if the cost to rebuild your home is $200,000, but you only insured it up to $120,000 (60% of the replacement cost) then your insurance company might only pay up to 60% of the repair cost, minus your deductible.
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How can I lower my costs?
You could consider increasing your deductible. This will lower your premium payment. When deciding what deductible is right for you, think about how much you can afford to pay if your property is damaged.
You can also use HelpInsure.com to compare sample rates for different companies.
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