DECREASING HOME VALUES - I CAN INSURE MY HOME FOR LESS, RIGHT? -WRONG!

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Economies are always changing and home values fluctuate with them.  During the past couple of years, many homes have decreased in value.  Looking for the bright side, I am now asked by optimists if they can insure their homes for less.  After all, this makes sense, right?

No way!

Remember that most home insurance pays for your home to be rebuilt just as it was.  While home values have been decreasing, the cost of construction has continued to rise.  (Could this be due to continued low interest rates?)

The key thing to remember here is: Your limit of property insurance should be based on the cost to replace it, not the current resale value.

To read a great article on this topic, click  here.