How is the value of the dwelling determined? Should the value of the lot be included?
The agent should complete what we call “A Replacement Cost Estimator”. This computer program takes into account the year your home was built, what type of home you have, how may square feet, how many bathrooms, etc. Once all the data is entered, the program will give us an approximate value that we should insure your home. Please keep in mind that what you purchased or what the home is assessed at has nothing to do with what it may cost to totally rebuild your home with today’s cost of construction. Since that land will still be there at the time of the loss, the value of the lot is not included in the total value of the dwelling. Since many companies now have a cap on Guaranteed Replacement Cost on the dwelling, it is very critical that both the agent and insured go over the replacement cost estimator.
