Insurance Coverage Details - Appraisal Value

The appraisal value of your home or auto will have an impact on the premiums you pay to insure the property. In general, the more expensive the property, the higher your premiums will be.

Appraisal Value of a Home

When your home is appraised, you will need to carry a limit on your premium up to the total value. Some policyholders decide to undervalue their home on an insurance policy. In this case, coinsurance penalties would apply. If you insure only 70% of the total value of your home, for example, then only 70% of the value of any loss would be covered when you make a claim. This is to keep people from underpaying on their insurance and still receiving full benefits.

Appraisal Value of an Automobile

The appraised value of your car is most important after an accident or if the car is used. The finance company that holds the title to your car will require you to carry insurance up to the total price of the loan. This is required so you do not destroy the car and default on the loan, leaving the title holder only with a low insurance payout to cover their loss. If the insurance company under-values the car, you will need to purchase extra insurance in order to make up the difference in values.

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