Most of the larger insurers are now capping their replacement cost payouts at
120 to 125% of the face value of the policy. Even if your agent is at fault for
underestimating the replacement cost of your property, you could be the one who loses in
the event of a catastrophe.
There is some concern, of course that agents will now be more likely
to overestimate your property value in order to protect themselves from potential
liability. Only time will tell on this matter.
If you have a concern that your home may be over or under valued on
your homeowners policy, we would suggest calling your agent for an in-home review or
talking with local contractors who have built homes in your area recently. Some
contractors will even examine your home and give you an estimate on rebuilding for a
No one enjoys thinking about the devastating effects of a fire in
their home, but the insurance companies are making the imponderable something you should
indeed ponder very soon.