HOMEOWNERS: Safeguarding Your Home with Adequate Coverage

Jun 30, 2023 | Affiliates


Choosing the right amount of coverage for your home is a critical decision regarding your homeowner’s policy. Your home is more than just a place to live; it’s your most valuable asset. You may need proper coverage to rebuild after a total loss. This process is known as insurance to value (ITV) in the insurance industry. You must have adequate coverage for your home.

What is insurance to value? 

Insurance to value (ITV) refers to the coverage amount listed under ‘Coverage A’ on your policy declarations page. It is commonly called “Dwelling coverage” or “Coverage A – Dwelling.” This amount represents the funds needed to reconstruct your home in the unfortunate event of destruction completely.

Why is the insurance value different from the value of my home? 

Insurance to value ensures that you have adequate coverage to reconstruct your home based on its specific characteristics, regardless of its current market value. The market value of a home takes into account various factors such as economic conditions, taxes, school districts, location, and the value of the land. These factors do not directly correlate with the cost of rebuilding a home and replacing all its contents.

Why is reconstruction more expensive than new construction? 

Builders of new homes often construct multiple houses simultaneously, enabling them to negotiate better prices for materials and labour due to economies of scale. However, there are no such savings when reconstructing a single home. Each replacement item is purchased individually, resulting in higher reconstruction costs than new construction.

How can we assist you? 

Determining the appropriate ‘Coverage A’ amount is your responsibility, and we are here to support you. As licensed insurance professionals, we utilize industry-leading underwriting tools to estimate the cost of rebuilding your home from the ground up, considering materials and labour. While this estimation may not capture every building material in your home, it is a starting point. Depending on your home’s unique features, you can work with your agent to adjust the coverage amount accordingly. We can provide valuable insights to help you make the right ‘Coverage A’ selection.

Follow these simple steps to ensure your home is insured to its full value:

  • Collaborate with your agent to provide detailed information during purchasing to ensure a thorough and accurate quote.
  • Inquire about additional coverage options that may be available in your state.
  • Regularly review your insurance to value calculation with your agent.
  • Inform your agent of any changes or improvements you make to your home, allowing for a re-evaluation of your coverage needs.

Contact Us

By following these steps and understanding the factors that make up your homeowners insurance, you can rest assured knowing that your home is adequately protected and insured for its full value. Contact Advantage Insurance Solutions at 877-658-2472. We are here to help you understand your coverage options, protect your unique homeowner needs, and provide peace of mind.

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