Understanding Insurance to Value

We want to help you rest easy. And we think you’ll be even more relaxed knowing you’ve made informed decisions about the amount of home insurance you need.

Market Value vs. Insurance Value

Your home’s market value is based on current economic conditions, school districts, the value of the land, location, and other factors. It’s what your real estate agent would probably list your home for if you put it up for sale. Your home’s insurance to value is based on what it would cost to completely rebuild your home from scratch after a total loss and replace all of your furniture, appliances, carpet and some personal belongings.

Rebuilding Is Different Than Buying

The cost to buy a home is different than the cost to rebuild. So you can’t rely on your home’s market value to set your insurance limits. An appropriate amount of insurance coverage will permit you to rebuild your home in the event of a total loss. That replacement value depends on the physical characteristics of your home, as well as the price of labor and materials in your area. In most areas, these costs increase with time.

Get an Estimate

Your local Safeco agent can estimate the typical cost of rebuilding your home based on the average costs of materials and labor in your area. However, this number won't reflect major upgrades made to your home or the cost of replacing custom and unique features. If you’re planning to remodel your home or if you just finished adding a new deck, garage or fence in the front yard, you should talk to your local Safeco agent and review your policy limits.

Get More Accurate

If your home is truly unique or custom built, of if you’d simply like additional peace of mind in knowing that you’ve selected the right amount of insurance coverage, it’s a good idea to consult with a construction expert. For a modest fee, you can hire a building contractor to give you a more precise estimate of how much it would cost to rebuild your home.

Include Your Personal Belongings

We recommend completing a thorough inventory of your personal belongings. Compare the value of your belongings to the home contents, or personal property limit, listed in your policy and make sure it matches.

The easiest way to do an inventory is to use a video camera, recording and describing items as you walk through your house. Store your video or photo inventory off-site, so you won't lose it if your house is damaged.

We also recommend using an online home inventory service like Know Your Stuff®.

Review Your Policy Once a Year

Home improvement and construction costs constantly fluctuate and rise. Once a year, it’s a good idea to review the maximum amount your homeowners policy will pay for in the event of a major or total loss. Contact your local Safeco agent to schedule an annual review of your home value and contents.

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© 2014 Liberty Mutual Insurance, 175 Berkeley Street, Boston, Massachusetts, 02116

Insurance is offered by Safeco Insurance Company of America and/or its affiliates, with their principal place of business at 175 Berkeley Street, Boston, Massachusetts, 02116. This website provides a simplified description of coverage. Nothing stated herein creates a contract. All statements made are subject to the provisions, exclusions, conditions and limitations of the applicable insurance policy. Please refer to actual policy forms for complete details regarding the coverage discussed. If the information in these materials conflicts with the policy language that it describes, the policy language prevails. Coverages and features not available in all states. Eligibility is subject to meeting applicable underwriting criteria. 36 USC 220506