Purchasing a home can be exciting. Not only will you have the freedom to decorate or make changes without asking permission as a homeowner, but you will be able to build valuable equity through timely mortgage payments.
Insurance plays a critical role in protecting you against financial harm in the event your home sustains damage. A lot of homes are underinsured because home values are constantly changing. Insurance appraisals can be useful in helping you keep your insurance in line with increases in the value of your dwelling.
Most insurance policies are designed to protect you against the cost of inflation. The coverage limit increases incrementally each year to help offset any increases in your home's value as a result of inflation. Unfortunately, the automatic coverage increase may not be adequate over the course of many years.
An insurance appraisal will help you determine if inflation has exceeded the automatic increase covered in your insurance policy so that you can increase your coverage if necessary.
It's not uncommon for homeowners to invest in remodel projects that can add to the comfort and function of their homes. These upgrades can do more than just provide additional square footage or refresh a dated interior, they can increase the value of your home as well.
It's important that you have an insurance appraisal completed after any major remodel project within your home. A new insurance appraisal will be able to factor in the added value of the remodel, giving you the ability to invest in adequate coverage for your home in the future.
Your homeowners insurance policy is designed to help you cover the cost of rebuilding your home if it is damaged by an accident or natural disaster.
Construction costs can fluctuate based on supply and demand at any given time. If a significant change in construction costs has affected the area in which your home is located, you may want to consider scheduling an insurance appraisal.
A new appraisal reflecting current construction costs will ensure that you have enough insurance to fully cover the cost of rebuilding your home. Without a current appraisal, your existing insurance coverage may leave you with a deficit that you have to pay out of pocket when the need to rebuild a damaged home arises.
Your home is a financial investment. You can use an insurance appraisal as a tool to help you protect your investment as dwelling values increase in the future.