The Indiana Department of Insurance advises insuring your home for at least 80% of its replacement value. Eighty percent is the magic number that unlocks better coverage, and not just because 80% is greater than 79%. What happens when you buy a policy with 80% of your home’s replacement value to make your coverage change? Irvington Insurance wants homeowners in Indianapolis, IN, to understand the reason behind this recommendation.

Replacing Your Home Versus the Old Home’s Cash Value

If your home is heavily damaged and needs to be rebuilt, a policy that covers at least 80% of its replacement value will cover the replacement value minus the deductible. The replacement value is the amount it would take to replace the home, considering costs at that time.

If the policy covers less than 80% of the home’s value, the coverage you get is based on the cash value of the home. This is the actual value of the materials of the current house (not the replacement) after depreciation. It’s usually substantially less than what it would cost to rebuild your home. 

Given how costs of everything, including construction materials, have increased over the past few years, don’t risk being unable to rebuild your home. Speak with your insurance agent about determining the replacement value of your home and constructing a home insurance policy that covers at least 80% of that value.

If you’re looking for an insurance agent in Indianapolis, IN, contact Irvington Insurance. Find the right policy and premium payment to get solid coverage for your house now, before winter ice storms and blizzards put your home at risk.