When many consumers in Scranton buy homeowner’s insurance, they often have no idea how much the policy should be. However, it is almost always a mistake to have the policy limit match the value of the property. It is nearly impossible for land to be damaged to the point where it is unusable. Even if there is a fire that destroy a whole house, the land would be reusable again after clearing the debris from the burned home. Homeowner’s insurance should cover the cost of replacing the structures on the property. There is no need to get a policy limit higher than that. The hard part is figuring out how high the policy limit should be for homeowner’s insurance in Scranton, PA.
One method to determine the policy limit for homeowner’s insurance is to use the tax assessment bill. In most instances, the tax bill contains a valuation for the land and a separate valuation for the improvements. Unfortunately, this is often a bad way to determine the policy limit. Tax assessments may not reflect the true cost or value of the home. They are often too high or too low by a significant amount. That is why it is usually not a good idea to use tax assessments to figure out the policy limits.
Another way to determine the policy limit for homeowner’s insurance in Scranton, PA is to use an appraisal. When consumers purchase a home with a mortgage, an appraisal is needed in order to gain approval for the loan. The same thing is true when a consumer wants to refinance the mortgage. In most instances, the appraisal will include an estimate on how much the land is worth as well as how much the improvements on the land are worth.
Finally, there are websites that help consumers get valuations for their property. As long as the website estimates the land and improvements separately, the property value generated by the website may be a good educated guess as to what the policy limit should be. As home values rise and fall, consumers may want to consider using those websites to adjust the policy limit.
