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Insurance to Value (April 2016) << Back
Properly protecting your single most important asset - your home.

Now that’s a big responsibility. Selecting the proper amount of coverage for your home is the single most important decision you can make with your homeowners policy. Without it, you may not have enough coverage to rebuild after a total loss. In the industry, this process is called insurance to value (ITV).

What is insurance to value?
Insurance to value (ITV) is the amount of coverage listed under ‘Coverage A’ on your policy declarations page. It is often referred to as “Dwelling coverage” or “Coverage A – Dwelling”. It refers to the amount required to completely reconstruct your home in the unfortunate event of complete destruction.
Why is insurance to value different than the value of my home?
A home’s market value reflects current economic condi­tions, taxes, school districts, the value of the land, location, and other factors that have nothing to do with the actual cost of rebuilding a home and replacing all of its contents. With ITV, you will have the proper amount of coverage to reconstruct your home – not what it was worth on the cur­rent market.
Why is reconstruction more expensive than new construction?
New-home builders typically build many homes at once, and bid out the jobs to receive the best pricing. Their busi­ness model is based on economies of scale. For example, they may purchase 20 bathtubs at once, securing a lower unit cost. Reconstruction cost for a single home is more expensive since there are no savings when buying just one replacement bathtub.
How we can help.
Selecting the right ‘Coverage A’ amount is your responsibility. Sound like a big obligation? Luckily, we are here to help. We have underwriting tools to esti­mate what it would cost – including materials and labor – to rebuild your home from the ground up. Like any estimation this will not perfectly capture every specific building item in your home. You should use it as a starting point and add to it depending on your home’s specific features. We can provide you with helpful information to make the right ‘Coverage A” selection.
Follow these simple steps to help ensure your home is insured to full value.
  • Provide us with detailed information at time of purchase to be sure that you receive a thorough and accurate quote
  • Ask us about any additional coverage options that may be available
  • Review your insurance to value calculation on a regular basis
  • Report any changes or improvement that you make to your home so we can re-evaluate your coverage needs
We encourage you to contact one of our insurance professionals at AHTKY to review the protection being afforded for your most valuable asset!
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AHTKY Insurance Agency, LLC
1451 W. Artesia Blvd, Suite A, Gardena, California 90248
CA License: 0C46036