First things first, some people do not realize that their Massachusetts Home Insurance insures the replacement value of their home, not the market or assessed value. The market value of homes is always changing, right now real estate prices are down in many markets, and because they fluctuate so much, it would be difficult to insure your home to that value – not to mention that if something happened to your house, the market value may not accurately represent the cost to replace, or rebuild it. This is why your home is insured to reflect the replacement cost – if you had to rebuild your home today, how much would it cost to do so.
Additionally, some Massachusetts Home Insurance policies have inflation guard built into the annual premium. Due to inflation, the cost to replace your home increases every year – the inflation guard helps to keep this cost up to date.
Note: if you make any additions or large renovations to your home that significantly increase the value of your home, it is a good idea to call your local Massachusetts Insurance agent to do a new rebuild cost estimator to reassess the cost to rebuild your home.
Making sure that the actual replacement value of your home matches the value listed on your MA Homeowners Insurance policy is very important. If a fire or other destructive force takes down your home, that is not the time that you want to deal with explaining that the value is not accurate!
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