Am I carrying too much insurance on my home?

Free Insurance Quote Comparison

 Secured with SHA-256 Encryption

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Written by

UPDATED: Jun 23, 2013

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

Insurance Question from Holyoke, MA

Asked on 06/23/2013

Am I carrying too much insurance on my home? My home is tax assessed at 70000, at say 25% higher for market value (87500) am I paying too much insurance if they are covering me for 225000

Answer given on July 16, 2013

Homeowner insurance is written in an amount that should protect you in case of a total loss to the home. This would be the replacement cost of the home. The coverage is based on local building costs, including materials and labor.The tax assessment is something used by the state or county to determine your tax rate. There are deductions usually allowed if the property is owner occupied as well as other adjustments as determined by the assessor. This has no reflection on its replacement cost.The market value is also based on local values of the home. It does not affect the replacement cost. You could be living in a depressed area as far as market value goes, but the rebuilding costs remain the same.You need to consider the cost of the materials used to build the home – lumber, concrete for the foundation, drywall, flooring, roofing and everything else. Then the labor costs for the area and the profit the builder would expect. This could make the replacement cost much higher than the market value.If you are still concerned, talk to your agent. They may know the local building costs and could explain how the value has been determined.


IMPORTANT NOTICE: These answers are for general information purposes only and are provided by the person answering and FreeAdvice.com AS IS. It has not necessarily been reviewed by the management staff of FreeAdvice.com nor is it binding any insurance agent, broker, or other insurance professional or any attorney or insurance company. Insurance laws, regulations and practices vary from state to state and insurance policies and practices differ from company to company, by type of policy, by state and locality and by type of insurance. Tiny variations in the facts, policy language or a detail not set forth in a question often can change the outcome or a professional's conclusion. Although FreeAdvice.com has confirmed that the answer(s) was/were provided for the account of an experienced insurance professional, that professional may not be licensed in the state referred to in the question, and may not be experienced or up to date in the subject area. Unlike the answers provided here, upon which you should NOT rely, for personal advice you can rely upon we suggest you consult a licensed insurance professional in your area or retain a licensed attorney listed on AttorneyPages.com to represent you.

Free Insurance Quote Comparison

Enter your ZIP code below to compare cheap insurance rates.

 Secured with SHA-256 Encryption