A common question I hear from clients is why my home is insured for more than what I paid for it. Of course, this is a fair question. However, we have to dig deeper to find the answer. First, you have to think about when you purchased your home, how long has it been? For example, I bought a home one year ago this month, and the home's value has increased by $40,000 over that time period. So to put that into perspective, if a tornado were to destroy my house to either rebuild or find a comparable house, the price of the new home would be more than what I paid even just a year ago. This is why I recommend to my clients to do a yearly checkup of their policies.
Next week we will go over how the reconstruction cost is determined.
As always, thank you for your time, and please don't hesitate to contact me with questions or topics you would like covered.