Dayton & Cincinnati home values drop! Why doesn’t my home insurance?

Cincinnati-Dayton home values drop

 

Home values in the Dayton & Cincinnati region continue to slide according to recent news reports.  

So this begs the question – My home value has dropped, why hasn’t the coverage on my home insurance dropped?

The answer is probably one that most consumers will not like to hear. Even though your home is probably worth less than what it was one or two years ago, most insurance companies do not take market value into consideration when insuring your home.  You see, most home insurance policies issued in Ohio offer either replacement cost insurance on your home or additional coverage above the dwelling limit on your policy to rebuild your home in the event of a total loss. For this reason, insurance companies insure your home for what they think it will cost to rebuild your home at today’s cost.

Every year your home insurance coverage is adjusted for inflation to help assure that you always have enough to rebuild your home in the event of a total loss. Even though you might have to sell your home for a lower price today than you would have two years ago, the cost to rebuild your home is more than what it was two years ago.

What’s a consumer in the Dayton-Cincinnati region to do?

You can ask your agent to complete a new replacement cost estimator on your home to make sure the insurance company’s coverage is correct. You may find that your home is overinsured and the coverage can be reduced to the new estimate. However, if a replacement cost estimate has not been done on your home in a number of years, it is more likely that you are underinsured and the insurance company will require you to increase the coverage on your home. 

Some ideas to lower the cost of your home insurance can be found in our blog article here.

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This entry was posted on Thursday, August 26th, 2010 at 3:52 pm and is filed under Agent Clint, Insurance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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