When purchasing a home, don’t be surprised if the insurance value of the structure is less than the purchase price. Often, the difference is because the house is being insured for rebuilding in the event of a loss. That does not include the value of the land it’s on or its market resale value.
There are many variables that support market value, which are not normally insurable. These may include real estate commissions, land and landscaping, sidewalks and site improvements, among other attributes. While some may be insurable separately, such variables are not normally included in your home insurance limit.
Keep in mind that changes in construction costs in your region can affect your insurance coverage needs. Your insurance agent can help you maintain adequate limits, so be sure to review your policy regularly.
