Are You Under Insured? 
By Jim Palmer Jr.

Since your home is most likely the largest purchase you will ever make, you should be sure to protect that investment with proper insurance.  Insurance costs are rising and many homeowners (especially in forested areas) are being canceled, so this is a tough subject right now.  Even if you think insurance is a scam, it is a necessity, especially if you have a mortgage.  The fact is that most people are under insured simply because they don’t understand that the replacement cost might be much higher now than when they purchased the property.  They may also not understand the total scope of their coverage. 

If you have made home improvements and upgraded bathrooms or kitchen, the replacement value may far exceed the amount of insurance you have.  Inflation, weather events, forest fires and the demand for labor could impact how much it would cost to rebuild your home. 

Many times homeowners are surprised and discouraged when they have a claim and realize that their insurance payout is anemic compared with the actual loss.  That is why it is important to review your homeowner insurance coverage at least annually.  Most homeowners just make the insurance payment dutifully without really thinking about whether it is adequate. 

In a recent case, a couple came home to a burning house after being at the grocery store for a couple of hours and could do nothing but watch as their newly built home burned to the ground in front of them.  Their dream home at the lake was a total loss and they spent the next 3 years fighting with the insurance company, only to come up short.  Their rebuild is about half the size of the original floor plan because the insurance pay out was far less than the cost to rebuild in the same location.

Your favorite real estate broker can provide an updated market analysis for your property, but remember that market value for a whole property including the land is different than the cost to replace your home and other structures.  On this topic you may be better served by talking with a reputable local builder to get a real hard estimate about what it would cost to replace exactly what you have. 
Then discuss with your insurance provider the details of your coverage to be sure you understand what your policy really means.  Is the insured amount enough and do you know what it covers you for (contents, hotel  costs, etc)?