2 Big Insurance Mistakes Homeowners Should Avoid In Virginia’s Housing Market

Summer is the time for families across the country to jump on the opportunity to sell their current home and find the next perfect fit. Virginia is no exception. With home values improving and mortgage rates hovering around 4% for all of 2017, buyers are jumping off the fence and into the buying market, leaving lower inventory and higher demand than we’ve seen in the Commonwealth in some time. Parts of Northern Virginia have seen new home sales double since 2015. Home ownership is returning as one of the best financial assets since the national real estate crisis.

Whether you’re in the market or content to stay put in your current Virginia home, our NNINS home insurance experts know a thing or two about protecting this asset under the current trends. 

I have homeowner’s insurance, you say. 

Yes, your lender requires that you have a homeowner’s insurance policy that at least equals the balance of your outstanding mortgage loan. But what about a catastrophic loss, such as a house fire or tornado? 

If you’re like most of our members, your home is your world. Suffering a complete weather or fire-related loss is devastating. And the hope and healing that comes from restoring your family’s home back to its full glory is absolutely priceless. 

The thing is, you must plan for it. Here are 2 key insurance factors that can influence a complete home restoration.

Identify Your Expense to Restore

Even though housing values have increased, your home’s value may still be less than the cost to completely rebuild it, depending on the labor and material costs in your area. For example, if your homeowner’s policy Coverage A value (the amount for which you insure the building) covers your home for $200,000, that would the largest payout towards the loss to your home, regardless of fluctuating building costs. 

We do provide a boost to your homeowner’s policy with an “inflation guard” that automatically bumps the amount of coverage up a small amount upon annual policy renewal to help protect against under-insuring. But it’s incredibly important for you to proactively be sure your home has adequate coverage.

Consider Extended Replacement Cost Coverage

A much better scenario is eliminating cost limitations if you needed to rebuild your entire home. We offer an Extended Replacement Cost endorsement for a small annual premium, increasing coverage to 125%. For the same $200,000 policy, your payout on a total loss and coverage to rebuild would be $250,000. That’s a nice bit of extra insurance for a nominal annual fee against today’s rising building and labor costs. Extra peace of mind and the flexibility to rebuild to today’s market standards might make this your best choice. 

We're Here To Help

Our independent agents are experts at finding valuable savings on your homeowner’s policy as well as the best cost replacement value for your Virginia home. When they are quoting for NNINS, they use our easy “e 2 Value” tool that enables them factor in your location, square footage and even building quality and craftsmanship.

If you haven’t looked over your coverage level in 5-10 years, it might be time to sit down or have a phone call with your local independent agent to be sure you’re not under insured. And it's also a good idea to check and see if you need protection against hazards unique to your Virginia community. Our underwriting team is also available to answer your questions anytime. Our focus during your loss is getting your family back home as soon as possible. Let’s make sure your home is protected in today’s growing housing market.



Why Become

A Northern Neck Agent?

Learn More