How Can I Determine if My Home is Properly Insured?

July 16, 2019

Is My Home Over Insured? Is My Home Under Insured?

Determining whether or not your house is over or underinsured starts with the “valuation” for your residence/dwelling. Let’s begin with some foundational information. Proper limits of coverage on the residence/dwelling starts with an understanding of the loss settlement provision your policy contains. Are your home’s losses paid based on?:

Replacement Value (essentially the cost to rebuild)
Actual Cash Value (essentially the cost to rebuild minus depreciation.
Some other type of valuation.

Knowing which type of loss settlement option (see bullet list above) your policy contains will then determine what limits of coverage are appropriate. Most home insurance programs intend to pay losses at replacement value. To properly insure policyholder’s homes, carriers “subscribe” to a specific “replacement cost guide” that will spit out the cost to rebuild your home based on factors such as:

Location-based costs of materials and labor
Square footage
Year built
Construction features

The replacement cost guides that carriers use are subscriptions from vendors like Marshall & Swift , e2value. So, how can I know if my home is over/underinsured?

Work with your agent or company representative and review your company’s replacement cost estimator. It is not uncommon for the details of your replacement cost guide to be inaccurate.

This is the best way to resolve appropriate limits of coverage for your specific policy.

Find a free replacement cost estimator and compare to your current limits. Here is one you could try: Cost to Build a Home

Once the valuation for the residence/dwelling has been determined, the rest of the coverages are typically percentages of the dwelling limit. For example, the percentages may look like this

Other Structures - 10 to 20% of the dwelling amount
Personal Property - 50 to 70% of the dwelling amount
Loss of Use/Additional Expenses - 20% (or more) of the dwelling amount

Coverage for Other Structures, Personal Property and Loss of Use may be customized (within limitations) to fit your needs. There are tools to help you compare your coverage to building cost norms. However, proper valuations and selection of limits for your homeowners insurance policy are best completed with the help or your agent or company representative. Have additional Homeowners Insurance questions? We LOVE to Help! Please feel welcome to call us at 607-324-7500
This article was originally published at https://www.quora.com/profile/Jeff-Ryan-24

< Older Post

Newer Post >

Auto Rates and Finger Prints: Both are Unique to You!

By Jeff Ryan • April 7, 2026

Factors You Can’t Easily Control These factors are built into your profile, but still play a major role: Your location: Claim trends, traffic, and weather patterns where you principally drive. Your age and driving experience: Especially for younger drivers. Other drivers in your household: Their age and driving history. The vehicle you own: Unique to the Year, Make, Model, and Sub-model’s damageability and cost of parts/labor. These factors significantly influence price differences, but they don’t tell the whole story. Factors You Can Control This is where habits and wise decisions can make a real difference: Your driving habits: Minimizing tickets and accidents can have a direct impact. Your coverage choices: Liability limits, deductibles, and optional coverages can vary widely. Your insurance consistency: Avoiding lapses in coverage. Your annual mileage: How much and how often you drive. Discount opportunities: Bundling, pay-in-full, NYS defensive driving course. Your Insurance Score (Yes—You Can Influence It) Insurance companies use a credit-based insurance score as part of their rating process. While it’s based on financial behaviors, it is not permanent—and it can be improved over time. Simple habits like: Paying bills on time Reducing outstanding debt Avoiding excessive credit inquiries… can positively impact your score—and in turn, your insurance rates. Your insurance score is under your control and a worthy mid to long-term project in and of itself. For more information on what you can do to positively influence your score, see: Great 8 Tip #8 - What's Credit Got to Do with Insurance? How Can I Improve My Auto Insurance Score Why Comparing Rates Doesn’t Work When someone says, “I only pay…” , the uniqueness of their fingerprint is missing. What are their: Deductibles Driving history Insurance score Household profile Coverage limits: what they may be giving up in terms of protection. Price without context can be misleading and discouraging.