Farmer's Insurance House Value Calculation

Farmers Insurance offers a wide range of insurance products, including home insurance. When calculating the value of a house for insurance purposes, the company takes into account various factors such as the age of the home, local construction costs, the square footage, the number of floors, and any unique features or renovations. The value is based on the estimated cost of rebuilding the home rather than the market value or the price paid for the house. This helps policyholders protect their investments and assets in the event of a fire, theft, or storm damage.

Local construction costs

To get an accurate estimate of local construction costs, it's recommended to talk to reputable contractors in your area about the cost of rebuilding a home similar to yours. A local contractor or appraiser will be familiar with the specific building costs in your region, as well as any applicable local building codes and ordinances that may impact the cost of rebuilding.

Online replacement cost calculators can also be a useful tool for estimating local construction costs. These calculators take into account various factors, including the square footage of your home, the number of rooms, and the type of exterior construction. However, it's important to remember that these calculators only provide a rough estimate and should be used as a starting point.

Another factor that can influence local construction costs is the age of your home. Modern building codes and standards may increase the cost of rebuilding an older house, as you may need to make certain upgrades to comply with current regulations. Additionally, older homes may have custom details and construction materials that are more expensive to source or replicate.

It's also worth noting that local construction costs can fluctuate over time due to various factors, such as changes in material prices, labour rates, and demand for construction services. Therefore, it's important to review and adjust your insurance coverage periodically to ensure that it accurately reflects the current local construction costs.

By considering these factors and staying informed about local construction costs, you can make more informed decisions about your insurance coverage and ensure that you have adequate protection in the event of a covered loss.

Home's age

The age of a home is a significant factor in determining insurance rates. Older homes tend to have higher insurance rates as they are more susceptible to issues such as fire and problems with HVAC and roofing. Older homes also have more problems than newer homes, and their systems and materials are more prone to damage.

The age of your home is the most significant aspect when considering your home insurance rates. Your premium will be higher the older your home is and if it's in poor condition. Newly constructed homes get an average discount of 36% compared to other homes.

The cost of rebuilding an older house can also be impacted by modern building codes. Older homes may need to be rebuilt to comply with new building code standards, which may require a change in design or building materials. This can result in higher rebuilding costs.

The age of your home's contents, such as plumbing and wiring, can also impact your insurance rates. If you are unsure about the age of these items, you can have your insurer perform an inspection to determine the replacement cost value and insurability of your home.

Additionally, older homes may have outdated electrical systems, original pipes with corrosion damage, insulation made of asbestos, or lead paint. These issues can pose a significant risk to the insurer, giving them the ability to deny coverage or charge a higher premium.

To keep rates low, it is essential to stay up-to-date on home maintenance and improvements. Regular maintenance and addressing any issues promptly can help mitigate the risks associated with older homes and may result in lower insurance rates.

Value of new and unique features

When it comes to calculating the value of your home for insurance purposes, it's important to consider any new and unique features you've added. These enhancements can significantly impact the replacement cost and, consequently, the coverage limit you choose. Here are some factors to keep in mind:

Renovations and Upgrades

If you've renovated your home, whether it's remodelling your kitchen or bathroom or adding luxurious touches like a marble floor or custom woodwork, these improvements can increase the value of your home. Be sure to include the cost of these upgrades in your estimate, as it may be more expensive to replace or rebuild them with specialised labour and materials.

Energy Efficiency

Upgrading to energy-efficient windows, doors, and roofing materials not only reduces your carbon footprint but also lowers your energy costs. These features can increase your home's value by at least 3%. Additionally, energy-efficient appliances and windows with the Energy Star symbol are desirable to buyers and can boost your home's value.

Smart Home Technology

Integrating smart home technology can be a valuable addition. Being able to control lighting, adjust the thermostat, and monitor your home remotely adds convenience and peace of mind. Features like smart security cameras and programmable thermostats are highly sought-after by buyers.

Outdoor Living Spaces

Decks, patios, and outdoor kitchens have become increasingly popular, transforming yards into extensions of living areas. These additions can increase your property's square footage and provide elevated spaces for seating and entertainment. Even a simple DIY deck can be a worthwhile investment.

Customised Features

Customised kitchen cabinets, for instance, can improve functionality and maximise space. Built-in features like appliance garages keep your counters organised and appliances within easy reach. Similarly, a built-in sound system can enhance everyday experiences and create lasting memories for your family.

Retractable Motorised Patio Screens

If you have a patio or deck, consider installing retractable screens. They help regulate temperatures, reduce maintenance by keeping out dust and debris, and create a comfortable space for year-round enjoyment.

Touchless Features

Touchless faucets, soap dispensers, and light switches cater to the growing demand for hygiene-conscious living. These features add a contemporary feel and appeal to buyers who prioritise modernity and sanitation.

Pot Fillers

For passionate cooks, pot fillers are a practical and aesthetically pleasing addition to the kitchen. They make filling pots faster and easier, enhancing the overall cooking experience.

Bidets

Bidets are becoming increasingly popular, especially with the advent of inexpensive and easy-to-install attachments. They offer various features, such as heated seats, motion sensors, air deodorizers, and adjustable warm water sprays.

Remember, when calculating the value of your home for insurance purposes, it's crucial to consult with a Farmers® agent. They can guide you in selecting the appropriate coverage limits and ensuring that your unique features are adequately protected.

Value of personal belongings

When it comes to insuring your home, it's important to consider the value of your personal belongings. This is because your home insurance policy will cover the cost of replacing personal belongings that are stolen, damaged, or ruined, up to a certain limit. To choose the right coverage, it's recommended to take a complete inventory of your possessions and their value. Here are some detailed steps to help you with this process:

Make a Room-by-Room Inventory:

Go through your house room by room and make a list of all your personal belongings. Include everything from furniture and electronics to clothing, linens, dishes, and even athletic equipment. Don't forget to also list items stored away. The more detailed your inventory is, the better. Include descriptions, serial numbers, and purchase dates for each item.

Use Photos, Videos, and Receipts:

As you create your inventory, it's a good idea to take photos or videos of your belongings. This will help provide visual evidence of their condition and existence. If possible, also keep receipts or other documentation that shows the purchase price and date. This can be especially helpful for more expensive items.

Estimate Replacement Costs:

Consider how much it would cost to replace each item at today's prices. The cost of replacing an item is usually higher than its actual cash value, so don't underestimate this value. Think about the cost of buying a comparable item in the current market.

Choose the Right Coverage:

Farmers® home policies typically start with contents coverage equal to 40% of your home's value. However, depending on your situation, you may want to increase this coverage to 75% or more. Consider how much you could lose in a fire, natural disaster, or other covered events, and choose a coverage limit that makes you comfortable.

Review and Update Regularly:

Don't forget to review and update your personal property inventory periodically. Whenever you make a new acquisition or a significant purchase, update your inventory accordingly. It's also a good idea to store your inventory in a safe place, such as a fireproof safe, safe deposit box, or digital cloud storage.

Consider Additional Coverage for Valuables:

If you have valuable items such as jewelry, fine art, or collectibles, you may want to consider purchasing additional coverage. Basic homeowners insurance policies may only cover these items up to a fixed amount, which may not be sufficient for high-value possessions. Talk to your Farmers agent about personal articles floaters, which can increase coverage limits and provide more comprehensive coverage for your valuables.

Value of prized possessions

When it comes to prized possessions, a basic homeowner's insurance policy from Farmers may not be enough to cover the full value of your more expensive items. For example, a $10,000 ring or a $7,000 painting would likely exceed the coverage limits for jewellery and fine art. To ensure that your prized possessions are adequately covered, you can consider purchasing additional coverage through personal articles floaters.

Personal articles floaters can increase the coverage limits for specific items and may provide comprehensive coverage for your valuable possessions. However, this additional coverage may require extra documentation and come at an increased cost. It is important to consult with a Farmers agent to determine if personal articles floaters are necessary for your situation.

To estimate the value of your prized possessions, it is recommended to create a detailed inventory of your belongings. This includes taking photos or videos, recording serial numbers and purchase dates, and keeping the inventory in a safe place, such as a fireproof safe or digital cloud storage. By having a comprehensive inventory, you can make more informed decisions about your insurance coverage and speed up the claims process if needed.

Additionally, it is worth noting that the value of your possessions can change over time. For example, the value of precious metals and gemstones can fluctuate, so it is recommended to have your jewellery appraised regularly to keep up with the current market value. This will help ensure that you have accurate and up-to-date information for reimbursement purposes in the event of loss or damage.

In summary, when it comes to insuring your prized possessions, it is important to understand the coverage limits of your basic homeowner's policy and consider the need for additional coverage through personal articles floaters. Creating a detailed inventory and regularly updating appraisals for valuable items can help you make informed decisions about your insurance coverage and streamline the claims process if needed.

Frequently asked questions