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...

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UPDATED: Jan 17, 2014

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Insurance Question from Belmont, NH

Asked on 01/17/2014

If I own my home, with no bank loans do I still have oIf I own my home with no bank loans do I still have to ensure it for full value ? NULL

Answer given on February 06, 2014

Even if you own your home free and clear, the insurance company will require you to insure the home for its replacement value.The reason for the requirement is that the insurance company sets rates based on replacement values of a home. If they insure the home for a lesser amount, then a partial loss could well end up being a “total loss” based on the amount of coverage. If the home burns and 50% of the home is damaged, and you only insured for 50% of the home, then the insurance company will have to pay full limits for a partial loss.You may be able to find a company that will insure for 80% of the replacement cost of the home, but the rates may end up being higher than a full value. If you insure it for less, then the insurance company will pay a pro-rate value – If you insure for 60%, then the insurance company will only pay 60% of the loss. This would not be beneficial to you, since you would not have enough money to make the repairs.


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