Home appraisal is a critical part of the home-buying process, but did you know it can also plays a significant role in your home insurance? Noyes Hall & Allen Insurance, serving the greater Portland, ME, area, wants to help you understand how appraisals impact your insurance coverage.
What Is a Home Appraisal?
A home appraisal is a professional assessment of your property’s market value conducted by a licensed appraiser. They consider factors like your home’s condition, size, location, and recent comparable property sales to determine its fair market value.
The Connection to Home Insurance:
- Setting Coverage Limits: The appraised value is different than the insurance amount. Insurers use rebuilding cost to determine the appropriate coverage limits for your home insurance policy. That can be more or less than the market value. You want to be sure you have enough coverage to rebuild or repair your home in case of damage or loss.
- Avoid Being Underinsured: You might underestimate your home’s replacement cost without an accurate replacement cost estimate. In the event of a claim, this could leave you with insufficient coverage to fully recover your losses.
- Premium Calculations: Your home appraisal can document factors that influence your insurance premiums. For example, a new roof, heating system or other update that can reduce your insurance cost. It can also flag repairs or updates that need to be made, which can increase costs.
Using Your Home Appraisal for Insurance:
- Share It with Your Agent: Provide a copy of your home appraisal if they ask for it. Depending on other information that’s available, they may not need it.
- Consider Special Coverage: If your home has unique features or high-value items, consider customizing your policy that provide additional coverage beyond standard limits.
- A Home Appraisal is Not an Insurance Inspection: after they write your policy, your insurance company will inspect your home. That’s different than a real estate appraisal or a pre-purchase inspection. Here’s what to expect from an insurance inspection.
If you have questions about a home appraisal or home insurance, contact Noyes Hall & Allen Insurance, serving the Portland, ME area at 207-799-5541.