THE SPROUSE INSURANCE AGENCY
434.847.4340
Your Home’s Value—When It Comes to Insurance
We often hear questions such as, “Why would I want to insure my house for $240,000 if it’s only worth $120,000, according to my property taxes?” The reason is that when you buy homeowners insurance you’re not insuring the market value of your home. You’re protecting yourself against financial loss if catastrophe would occur. Would it cost more than $120,000 to rebuild your home from scratch? The answer is usually yes.
That’s why it’s important to insure your home at the level it would cost to replace it—not its market value. Although it might seem like you’d save money if you insured your home for its market value, you could end up worse financially if disaster hits.
It might seem strange to think about. People are inclined to think in terms of value—how much is your car worth? How much did you spend on that coat? But when it comes to insuring your home, the current market value isn’t necessarily the most important aspect. Keeping yourself protected from financial disaster is.
Even Renters Need to Protect Their Homes
It may not be a house, but your apartment is still a home, filled with memories and personal belongings. The best way to keep them financially protected is with renters insurance.* (Your landlord’s insurance should cover any structural damage that might occur, but it won’t cover your personal things.)
Most importantly, renters insurance includes protection against thieves. Since the burglary rate for renters is about 50 percent higher than for homeowners, according to the Insurance Information Institute, renters insurance is a worthy investment to consider. It also covers:
•Personal property, wherever it may be. (If you go camping or traveling, your tent, luggage or other belongings will be
financially protected).
•Loss of use, which covers the additional living expenses you incur due to temporary relocation.
•Personal liability for bodily injury, property damage or personal injury claims brought against you anywhere in the world.
•Medical payments to others who are injured in an accident arising from your premises or personal activities.
