107 Airport Rd. Westerly, RI 02891 (401) 596-0146 service@thorptrainer.com

Insurance agents are often asked, “Why is my coverage so high when my home value is much lower?” There are many different figures thrown around regarding the “value” of your home. Let’s visit these to explain the differences.

For insurance purposes, Replacement Value is used. Replacement Value is the amount it would cost to completely rebuild your home of like kind and quality in today’s market for labor and materials. This value does not include the land that the home sits on.

For property tax purposes, Assessed Value is considered. Assessed Value is determined by the corresponding government municipality and takes into account condition and location of the home. This value is derived using the Town’s budget and corresponding mill rate.

For mortgage/finance purposes, Appraised Value is utilized. An Appraisal is an unbiased professional opinion of a home’s market value and is a snapshot in time which is impacted by real estate market sales.

To summarize, depending on what you are looking for (insurance, taxes or market value) the numbers could be very different for the same exact house. If you would like more information, call Thorp & Trainer at 596.0146.