Imagine how devastating it would be to lose your home in a fire. Now imagine not being able to rebuild it completely because you didn’t have the correct amount of insurance. Selecting the proper amount of coverage is the single most important decision you can make with your Homeowners policy. Without it, you may not have enough coverage to rebuild after a total loss. This is called “insurance to value.” Below are some explanations and tips to help you make the right choices for your needs — and remember, if you need help, we’re just a phone call away!
What is insurance to value?
Insurance to value is the relationship between the amount of coverage selected (typically listed as “Coverage A” or “Dwelling Coverage” on your policy declarations page) and the amount required to rebuild your home. Insuring your home for anything less than 100% insurance to value could mean you wouldn’t have enough coverage to replace your home in the event of a total loss
Why is the cost to rebuild different from the market value?
A home’s market value reflects current economic conditions, taxes, school districts, the value of the land and location, and other factors unrelated to construction cost. The cost to rebuild your home is based only on the cost of materials and labor in your area. It is important that you insure your home based on its reconstruction cost, NOT its current market value
Why is reconstruction more expensive than new construction?
New-home builders typically build many homes at once, and solicit bids from various sub-contractors to receive the best pricing. Their business model is based on economies of scale. For example, they may purchase 20 bathtubs at once, securing a lower unit cost. These economies of scale don’t exist when building a single home.
How can I make sure I have the correct amount of insurance?
Work with your agent to provide detailed information at time of purchase to be sure that you receive a thorough and accurate quote.
Ask us about additional coverage options that may be available.
Review your insurance to value calculation on a regular basis with your agent. Tell your agent about any changes or improvements that you make to your home.
Many home policies provide limits for certain personal possessions ($1,500 to $2,500 for your jewelry, $200 to $2,000 for coin collections, etc). In the event of a covered loss, would your current policy allow you to replace your lost, stolen or damaged items? Ask us about how to properly insure your valuable items. At this special time of the year, keep this in mind if you acquire new jewelry items that may exceed these limits.
We pride ourselves in understanding our policyowners’ goals and commitments. Everyone at Illinois Mutual relates to the desire to provide for our families and make sure they’ll be taken care of if hardship arises. Whether the need is life insurance, disability insurance, or worksite insurance, we ground our business in honesty, service quality, fiscal responsibility, and genuine respect for every individual at every touchpoint.
Compassionately delivering financial products to hardworking Americans in the middle market means offering flexible plans that allow our policyowners to tailor their policies to their individual situations. Then the rest of the work is done by the Illinois Mutual team, providing exceptional customer service, agent support, and product innovation to ensure the people we serve from all walks of life are always cared for.
As an independent insurance agency, Timber Creek Insurance Services works with many insurance companies and can help you compare protection and prices to find the coverage and value that’s right for you.
We’re your local agents –real, live members of the Decatur community, so we know how to get you the right insurance for your vehicle. Whether your insurance needs are for hitting the winter trails, taking a summer drive, or just the everyday commute, our team can help you find the right insurance to keep you covered.
Our commitment is to serving you
Timber Creek Insurance Services knows that in Illinois, there are as many unique insurance needs as we have neighbors who live here! To talk with one of our helpful team members about your insurance needs, contact us today at (217) 330-5179.
Love Bites—Get Umbrella Coverage
In today’s economy, everyone is pinching pennies. So why worry about umbrella coverage? Shouldn’t a home and auto policy leave you adequately covered?
Unfortunately, we live in a world of lawsuits. Large damages can be awarded, be extremely expensive and have long-term financial impact. Those lawsuits can come from unlikely sources, such as our furry friends.
Take Herschel for instance. Herschel is a much-loved, rather timid golden retriever who enjoys taking naps on the driveway while his owner mows the lawn.
Herschel watched from eight feet away as his neighbor, a 39 year old man, showed off his rollerblading skills to his kids. The man wiped out on the sidewalk in front of Herschel’s house and broke his leg. He required surgery, costing around $35,000 in medical costs and $18,000 in lost wages.
Fair or not, the man brought a lawsuit against Herschel’s owner, suing for $220,000 in damages. He alleged that Herschel had caused the accident by getting in his way, despite multiple witnesses to the contrary. But Herschel’s owner was lucky--a jury vindicated Herschel. However, lawsuits such as these can easily exceed the limits on a homeowner’s policy, leaving the insured responsible for the remainder. An umbrella policy would prevent that, giving you an extra $1 million to $5 million in coverage.
Our furry friends can put your assets at risk in other ways as well. According to the Center for Disease Control and Prevention, 4.7 million people are bitten by dogs each year, with half of those occurring on the owner’s property. Dog bites, according to the Insurance Information Institute, account for about a third of all homeowner’s insurance claims, which only cover limited damages.
Protect what you love. Call us to talk about your umbrella options.