With home insurance, who is the one that determines the value of my property?

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Asked January 31, 2014

1 Answer

Commonly the value of the home is calculated on a price per square foot basis. However, that amount is only useful for determining a base value of the home and does not take many factors into consideration, such as your location, and whether the calculation includes other structures on the property. And none of these calculations look at the cost of your personal property.

Start by doing some online research. You can find several sites, such as zillow.com, which will provide you with value of the home on the real estate market. These services are usually free, and can give you enormous insight into the property values of an area. Similarly, do a little footwork, visiting local open houses. This will let you see what other properties in your area are going for, and how the values were reached.

Purchase a professional appraisal. These are not free, but the money you spend on a professional appraisal is worth the investment if you live in a large home or the sale of the property has complexities involved. If you want a free appraisal, try calling local Realtors. Many times, a Realtor will give you a free appraisal, or provide a comparable market analysis with the goal of winning your business in the future if you decide to sell.

For your personal property, the best method of determining the value is to make a home inventory. You can do this by going from room to room with a video recorder, capturing everything you own, from the carpets to the ceilings. Include close-up shots of items to show their brand and condition, and include copies of the receipts. As far as your home insurance is concerned, the value will depend on whether you have full replacement insurance or Actual Cash Value, with ACV coverage paying only a depreciated value on your property.

Answered January 31, 2014 by Anonymous

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