Determining insurance value
Ok, this is slightly OT. We bought a foreclosed home, ripped everything out and replaced it. We went from 1988 builders grade everything, to updated semi custom everything (1500 sqf ranch if it matters to anyone). We have nearly $50,000 in materials alone into the house. We did all the work ourselves with almost 9 months into the project. Since we are nearing completion I called our home insurance company to update our coverage.
After having some difficulty getting the agent to call back I finally got an email from her, according to the computer system they use the upgrades to the house only increase the replacement value by $17,000. Say what? I said no way, that has to be wrong. She says nope. You can increase the coverage if you want to but this new figure is plenty of coverage. Again I disagree. One specific point I make is the kitchen. We did a mid range semi custom line (kraftmaid) of maple cabinet, midrange appliances and quartz countertops. She says that actually the countertops account for a large portion of the value increase. But, she says, we were already covered for cabinets and the new ones don't change the value at all. Again, say what??? My brand new maple cabinets are equal in coverage value as the falling apart builder grade oak we tore out?!?!?!?
I do get the difference in resale value and insurance value. I want the house covered enough that if we needed to replace anything we could do so with the "nicer" stuff we used this time. I also want it covered that if we were to need to repair or replace that labor costs are included, because I will never do this diy Reno thing again. Never.
So, best way to determine a homes replacement value? We were thinking it should be at least the cost of materials we put into it. Thoughts? Thanks.