[1]
Market Value Doesn’t Equal Insurance Value!
By Lou Marinaccio
During these turbulent times, we have seen market values of homes plummet as much as 75% of the listing price or previous sales price. One’s first impression is, “why don’t I insure to that value and save those premium dollars?” Don’t be tempted. Any good insurance agent will caution you against that course of action.
The term “replacement cost” means replacing like quality for like quality. The original workmanship and quality of materials will always be more difficult to replace at any time. Given that we have been fortunate so far with few named storms in the 2008 and 2009 Hurricane seasons, many people underestimate the value of having a higher value on their property coverage.
Because MGA Insurance Group writes property coverages in all 50 states, we have seen firsthand the effect of increased demand and impact on prices when a storm or catastrophic hits. Owners of homes scramble for new materials, contractors seize on the opportunity to maximize margins, and invariably, prices rise and the higher value on replacement costs can protect the homeowner who is insured to “Insurance Value.”
The moral to the story is simple. Engage a licensed and experienced property and casualty agent who has the knowledge and your best interest at heart.
Lou Marinaccio is the CEO of MGA Insurance Group located in the MGA Commerce Plaza at 9024 Town Center Parkway, Lakewood Ranch, FL 34202. Lou may be reached at 941-907-3828 or via email at lmarinaccio@mga-insurance.com [2]. For more information on MGA Insurance visit www.mga-insurance.com [3].
Copyright © 2010 REAL Magazine
Links to this article are encouraged
[4]