The art of home insurance valuation and why it matters

It wasn’t long after we opened for business in Connecticut last year that the calls started. Turns out, there are a lot of people living in and around Greenwich who are concerned that their homes are over-insured.

They are right to be. It takes diligence and experience to determine the replacement cost of the architecturally and historically significant homes in this area. Many insurance policies do get the value wrong—and as many are too low as too high.

I’ve spent more than 30 years helping successful people protect their distinctive homes and unique possessions. In 2017, I joined a small group of insurance veterans who believed that our industry was making things too hard for customers. We started Vault to offer affluent families an easy, personal way to protect what’s important to them.

I should add that I am passionate about art and design. When not working, I prowl the showrooms of Manhattan’s Decoration & Design Building and have way too many piles of architecture books and magazines. So I’m definitely going to spot the Gracie wallpaper, Tischler windows, custom millwork, and all the other touches that make your home special.


Understanding  valuation

Which returns us to the question of how to determine if your home is insured for the right value. (If you’re not sure what your insurance covers, by the way, look for the “dwelling limit” on your most recent homeowners policy.)

Your biggest worry should be that the amount is too low to replace the same quality construction and materials you live in now. Some mass-market insurance carriers tend to base their coverage on assumptions about average homes in the state or even the country. Too often they overlook the cost of replicating the craftsmanship of historic New England homes, not to mention the luxurious fixtures and finishes inside them.

You’ll get a more accurate appraisal from a company that specializes in higher-value homes, such as Vault. But even a well-done valuation becomes less precise over time. Many of our competitors have not re-inspected homes for years and have applied hefty inflation factors annually, even in periods when inflation and construction cost increases were nominal.

Photograph – David Papazian


Asking the right questions

If you aren’t sure that your home’s value is correct, ask your insurance agent or broker to contact the company. At a minimum, you want to receive a clear and thoughtful explanation of how the value was derived. Better still, the company should agree to reinspect your home if needed. (In the era of coronavirus, this can usually be done virtually.)

If you aren’t satisfied with what you hear, ask your agent to explore other carriers. At Vault, we are always delighted to speak to current and potential customers, to explore their unique circumstances, and to offer the coverage most suited to their lifestyle. We’ve also got a vast network of resources who can help install a backup generator, build a safe room for your art collection, or do whatever else you need to keep your home and family secure.

We look forward to speaking with you.

 

Steve Bitterman
Chief Risk Services Officer
Vault Insurance

 

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