Call Us 413-536-2685 ☰ ˟
Logo
413-536-2685
English  /  Español
  • Certificate Request
  • Get A Quote
  • Blog
  • What We Offer
    • Automobile
    • Business & Commercial
    • Commercial Auto Insurance
    • Homeowners
    • Recreational Vehicle
    • Workers Compensation
  • Resources
    • Make a Payment
    • Refer a Friend
    • Important Links
    • Insurance Glossary
    • Privacy Policy
  • About Us
    • About Us
    • Employee Directory
    • Customer Testimonials
  • Our Locations
  • Contact
    • Contact Us
    • Join Our Newsletter
Icon Instant Auto Quote Icon Instant Home Quote
Icon Business
Icon Workers Comp
Icon Business Auto Icon Recreational
Home > Blog > 3 Facts About Upside-Down Properties and Home Insurance
TUESDAY, MAY 5, 2020

3 Facts About Upside-Down Properties and Home Insurance


White 2-storey House

There are few scenarios in which homebuyers don't expect their home to increase in value over time. The nature of real estate is to trend upward, even if there are dips along the way. But it's important for homeowners to know what will happen when things don't go according to plan. An upside-down property refers to one in which you owe more than the home is technically worth. We'll look at how home insurance factors in and what you should do if you're in this situation.

Know the Costs to Rebuild

The most important thing about upside-down homes is what it would cost to rebuild. In other words, if your home is leveled by a tornado, do you know exactly how much it would cost to rebuild the entire structure from scratch? While it's unusual for homes to be demolished, it's not unusual for homeowners to need to make significant repairs due to serious damage. Unless you're planning to move, you'll need your home insurance to cover the costs — even if those costs exceed the property's assessment value.

Understand Replacement Terms

The replacement costs on your policy refer to how much it would cost to rebuild the home with similar materials in the case of destruction. The actual cash value refers to what you would get if you chose to sell the home at the time of the claim. Your benefits will depend on the plan you select. When you're choosing the amount of coverage you need on an upside-down property, you should be opting for an amount that comes close to the true replacement costs — as opposed to the market value of the property.

Stay On Top of Changes

It's not uncommon for homeowners to have underinsured homes. Some people willingly choose to forego coverage, but many simply aren't aware that they need to update their policies. If your block begins to lose value and your home insurance is based on the market value of your home and not the replacement costs, you could end up losing more than you realize in the case of serious damage.

Talking to a home insurance expert can be a great way to learn more about when to opt for the property's replacement value. And while it may be difficult to opt for the additional coverage, the benefits far outweigh the negatives if you need to file a major claim.

Posted 1:12 PM

Tags: home insurance
Share |


No Comments


Post a Comment
Required
Required (Not Displayed)
Required


All comments are moderated and stripped of HTML.

NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2020
  • 2019
  • 2018
  • 2017
  • 1999

  • car insurance(74)
  • home insurance(74)
  • auto insurance(73)
  • commercial insurance(41)
  • business insurance(41)
  • property(16)
  • home security(10)
  • life insurance(8)
  • accident(8)
  • summer(6)
  • health insurance(5)
  • teen drivers(2)
  • rental car(2)
  • claims(2)
  • car safety(2)
  • water damage(2)
  • home maintenance(2)
  • travel(2)
  • flood(2)
  • fire safety(2)
  • collision(2)
  • liability(2)
  • fire(2)
  • small business(2)
  • student drivers(1)
  • liquor(1)
  • vacation home(1)
  • pests(1)
  • spring(1)
  • llc(1)
  • condo(1)
  • office safety(1)
  • ventilation(1)
  • winter(1)
  • landlords(1)
  • chi insurance agency(1)
  • earthquake(1)
  • car accident(1)
  • dental insurance(1)
  • loss(1)
  • rust damage(1)
  • distracted driving(1)
  • wind(1)
  • senior drivers(1)
  • elderly drivers(1)
  • roof(1)
  • liability insurance(1)
  • grill safety(1)
  • older homes(1)
  • massachusetts(1)

View Mobile Version
Insure your needs today!
Social
Quick Links
Home
Get A Quote
Customer Service
Payment Options
Report a Claim
About Us
Our Carriers
Partners
Blog
Contact Us
Location 416 Main Street
Holyoke, MA 01040

P: 413-536-2685
F: 413-532-0889
E: support@chiagency.com
Powered by Insurance Website Builder