Why You Should Have An Up-to-Date Appraisal For Your Home
Your home is one of the biggest investments you will make in your lifetime, so it’s especially important that you protect it with a comprehensive insurance policy. But in order to do so, you must first estimate the market value of your home.
Knowing approximately what your South Florida home is worth can benefit you in many ways. It allows you to have greater control over your insurance premiums, your property taxes and the eventual refinancing or sale of your home. What’s more, in the event of a claim or a total loss, having an updated appraisal can also relieve you of the burden of a costly co-insurance penalty.
Of course you can make an educated estimate about the value of your home yourself, but for a precise figure, you will need to hire a licensed professional to do an appraisal. Here are a couple of reasons you want to make sure that figure is up-to-date.
It’s common knowledge that no one likes overpaying for products or services. From luxury items to necessities, everyone likes to keep as much of their money as possible. In this way, appraisals are like safety nets, valuable services that save you from overpaying where you don’t have to.
If you regularly have your home appraised, you are more likely to discover that the value has changed. For instance, if the value has dropped but you are still with the same policy that insured your property’s greater value, then you are paying more than you have to each month on your policy premiums. Armed with the updated knowledge afforded by regular appraisals, you can meet with your insurance provider and negotiate new terms that more accurately reflect your property’s true value.
Avoid Costly Penalties
Regular appraisals save you money by helping you avoid unnecessary expenses—namely the coinsurance penalty. This penalty occurs when “the limit of insurance purchased by the insured is not at least equal to a specified percentage of the value of the insured property.” In other words, this coinsurance provision gives your insurance company the right to penalize you by reducing the amount of your claim payment in the event the amount of insurance you purchased is inadequate.
If you are worried that you could receive a coinsurance penalty, we recommend you contact your insurance agent and ask them to go over your full Explanation of Benefits (EOB).
An up-to-date home appraisal nips this problem in the bud. As we mentioned before, if you know the current value of your home, then you can purchase an appropriate amount of insurance sufficient to cover you in the event of a loss, keeping your insurance adequate and keeping you out of harm’s way.