Property Values and Your Home Insurance:  How Do You Get it Right?

We continue to realize the impacts of a record-level real estate market.  Homeowners do not need to look very far to read signs that their home re-sell value might be at its highest level ever. With inflation reaching a level not seen in years, a pandemic that has triggered sky-rocketing material costs and labour shortages in most industries, the average home has undergone sizable increases in property values and the cost to rebuild has left customers at risk of being underinsured on their home insurance.   Before you renew your home insurance, let’s take a look at a few of the most common things to consider when it comes to your home and covering it for its proper rebuilding value. 

• What is my home insured for now?
  

  Grab your policy and take a look at the replacement cost value of your home.  Most people have a general idea of home values in their area.  Its not scientific, but if your policy has your home valued lower than what similar homes in your neighbourhood are selling for, it could be an indication your rebuilding coverages are too low. 

• Remember your renos.

  You may have already talked to your broker about recent renovations you’ve completed in your home, but if you haven’t, be sure to do so before you renew your policy. Finishing your basement, completing a sunroom or building an addition may have changed the value of your home, meaning you might need to increase your coverage.

• Frequent home evaluations. 

  Brokers are equipped with tools that can easily assess the rebuilding cost of your home.  These evaluators are kept current with true material costs and other factors that may add to fluctuating building costs.  It’s recommended that customers have their home evaluated every 3-5 years at least, and more frequent if your home has undergone changes.

• Guaranteed Replacement Cost (GRC). 
  

  GRC is an important coverage on a homeowners policy and acts as a safeguard where a home value is lower on the policy than its true rebuilding cost.  Essentially, GRC pays for replacement without reduction for depreciation and permits a homeowner to rebuild or replace their property, even if the damage exceeds the policy’s limits.  Most insurance companies will provide the coverage but there may be restrictions to qualify.  It’s highly recommended that you have the GRC endorsement. 

Talk to you broker. 

The best way to get it right is to speak with your Broker.  Your Broker can walk you through the evaluation process and amend your policy to avoid gaps or underinsurance and leave you feeling confident about your coverages.