Question

Explain why insurance to value is important to property insurers, and how insurers encourage insurance to value

Answer 1

Insurance to value is cost to repair or replace your property.

As the property gets older, there is a need to repair it. However, price of raw material and labour increases with time. Also, there are other expenses involved after repair. This may account for even more than new property price. Having Insurance to value gives insurance protection to homeowners and it helps in reducing expenses. Thus, insurance to value is important to property insurers.

Insurers determine replacement cost of the property. They suggest required coverages and deductibles to be used as per property risks. This helps is reducing expenses.