Home Insurance coverage vs Total Assessed Value
How much coverage should you have for your home insurance?
It happens many times when people say I couldn't sell my home for that amount or that's not matching my assessment. I enjoy explaining the insurance side of it. If just using the Total Assessed Value for your home there will be a bunch of problems. Home insurance is to replace the home 100% like rebuilding it from the ground up. Here's some examples:
First off we use for home insurance detail such as square footage, bathroom count, garage type, and many other things. Here are some numbers we found that we would use:

We will then take build quality and create a replacement coverage amount. If we used the Total Assessed Coverage here's what would be the problems.
Example #1
Home Insurance #1

Should we insure the home for $249,200? Well, not right, because $60,000 is the land value. It will still be there if the home burns down. If you did then $189,200 would be just for the home. So for the home insurance on the coverage for the home is actually $283,000! Using the finished square foot and other details.
Example #2
Home Insurance #2

Insurance the home for replacement coverage for $287,100? How about $37,100? Look at the Land Value $250,000! This one is insured for $123,000. This happens to be a home on a lake. The home insurance replacement is for replacing the home not for the land.
Example #3
Home Insurance #3

Here's another Home insurance policy that they have $1,344,000 replacement coverage for their home. So now it's higher than what it would sell for. Why double? Well this home is now bigger than when the total assessment value was done. We talked to them about the coverage. Apparently they finished basement and added extra sqft finished. So we did the correct replacement coverage for the Home Insurance.
Buying a new home? Wondering if your home insurance correct coverage?
Contact us please!