February

10

Your home is growing; your coverage should, too

Many people start out their adult lives initially renting after moving away from their parents. Then they tend to get married and decide that it is time to buy a home. The most common choice of housing that most newlyweds will opt for is what is referred to as a starter home. The hope is that it will be possible to sell the relatively small starter home and then buy a larger home as a family starts to grow.

Interesting changes can happen after people move into a new community. Some families decide that they like the neighborhood they live in. Their kids might be settled in school and have many friends that they enjoy. The family may also really love their starter home some much that there is no real desire to move. Rather than getting a real estate agent and looking for a new home, these families might decide to add a room or two onto their existing home structure. If the house is located in an area with bouts of bad weather, they may also want to add a garage.

When our hypothetical family bought the house, it may have been worth 100,000. After renovations and expansions, it may be worth 150,000 or even over 200,000 if the housing market is decent. This is a really great appreciation in value, and it comes at a correspondingly great cost. In all likelihood, this family bought an insurance policy with the initial loan because their lender required it. If they were able to pay for their renovations without taking out a second mortgage, it may have slipped their mind to add additional coverage on the current value of the structure. A total loss would lead to the insurance policy paying on the original value of the home, not the current value. Those who have made large home improvements should look to http://www.insurancetown.com/ to see where they stand in terms of their current insurance coverage. The experts at Insurance Town will be able to give quotes that will fit a family budget and meet the changing needs of growing houses and families.


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