The value of your home has likely increased significantly over the last 2 years. Home values are up across the country. According to S&P CoreLogic, real estate prices were up 19.5% from August 2020 to August 2021. Also, many people who have been housebound took steps to improve their homes during the pandemic. With your home value potentially increasing by double digit percentages, it is a suitable time to revisit the Dwelling coverage or Coverage A on your homeowners’ insurance.  

Coverage A is the amount that your insurance company will pay to repair or rebuild your home. Building costs have increased significantly as well over the last 2 years. Supply and labor shortages coupled with increased demand has led to higher cost to build. Some policies have inflation protection which raises this coverage every year, but costs have risen so quickly that this may not be enough. Furthermore, if you have made improvements that your carrier is unaware of your coverage may not reflect the cost to rebuild.  

If you think your dwelling coverage may be too low, contact your insurance agent. I asked my agent, and she was able to get an estimate on the cost to rebuild based on details I provided about our home. We were about $30,000 lower on our Coverage A than we should have been. Some policies also have riders that will pay a certain percentage above your stated coverage. Your agent will be able to tell you if you are underinsured. Keep in mind that increasing Coverage A can also increase your deductible, including your “Named Storm Deductible” as which is typically expressed as a percentage of Coverage A. 

Please do not hesitate to reach out to us with any homeowners insurance questions you have!