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Houses in NeighborhoodWith the housing market picking back up, you might be wondering if you need more homeowners insurance coverage should the value of your home increase. The answer is dependent on the cause of your home's increased value.

Let's say you've made no renovations — your house remains as it was — but home values in the area are picking up. This is when it's important to know the difference between:
  • Market value: This refers to the value of your house if you were to sell it, which accounts for real estate trends such as location, views, nearby schools, neighborhood amenities and more.
  • Replacement cost value: This refers to the cost of rebuilding your home from the ground up in case of a total loss.
Homeowners insurance is designed to protect your home — and wallet — from damage and destruction, meaning that your property coverage should reflect the replacement cost value of your house. If a fire destroys your home, you want to ensure that you have enough coverage to rebuild. But rebuilding has nothing to do with school districts and shopping opportunities. So, if your home's value increases in market value only, it is not necessary to purchase more coverage.

However, it's a different story if the replacement cost value of your home is increased. When does this happen?
  • Construction costs in your area are significantly increased
  • You make major renovations, such as adding an attached garage or an additional room
  • You remodel a room, such as updating the kitchen cabinets
The cost of remodeling or renovating can increase your home's replacement cost value because of more expensive materials and appliances. To avoid exceeding your previous coverage limits, talk to your independent insurance agent about updating your homeowners policy to account for the changes.

We'll help you find the right amount of coverage. Call First Insurance Group at (800) 511-2892 for more information on Bardstown home insurance.
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First Insurance Group
Main Office 2520 South Highway 27 | Somerset, KY 42501 | Phone: (606) 679-3570
Bardstown 107 Lincoln Way | Bardstown, KY 40004 | Phone: (502) 348-5921
Frankfort 1510 Louisville Rd | Frankfort, KY 40601| Phone: (502) 223-5100
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