Is Your Homeowners Insurance Keeping Up With Your Home’s Value?

Northern New Jersey home values have been on the rise, and that’s great news if you’re a homeowner in Wayne or surrounding towns. But here’s the catch: as your home’s value goes up, your insurance coverage may not be keeping pace.

That gap could leave you underinsured at the exact moment you need protection most.

Why It Matters Now

Over the past few years, home prices in Northern NJ have climbed steadily. At the same time, the cost of construction materials and labor has increased, which means it’s more expensive to repair or rebuild a home after damage.

If your insurance policy hasn’t been updated recently, the dwelling coverage limit (the amount your insurer will pay to rebuild your home) may no longer reflect today’s real costs.

Example: A home you bought for $450,000 a few years ago might now be worth closer to $600,000. But if your policy is still based on that older value, you could face a significant shortfall if disaster strikes.

Common Coverage Gaps to Watch Out For

1. Dwelling Limits

   • Your policy’s dwelling limit should reflect the replacement cost, not just your home’s market value.

   • If you remodeled your kitchen, added a deck, or finished a basement, your coverage may be outdated.

2. ACV vs. Replacement Cost

   • Actual Cash Value (ACV): Pays for repairs minus depreciation (you get less for older items).

   • Replacement Cost Coverage: Pays to repair or replace at today’s prices, regardless of age.

   • Many homeowners don’t realize they’re on an ACV policy until they file a claim.

3. Endorsements & Riders

   • Valuable items (jewelry, artwork, collectibles) often aren’t fully covered by a standard policy.

   • Sewer backup, sump pump overflow, and flood damage usually require separate endorsements.

5 Smart Action Steps This Fall

1. Pull out your current policy and review your dwelling coverage limit.

2. Ask your agent for a replacement cost estimate — not just market value.

3. Check your personal property coverage — does it match what you actually own today?

4. Review endorsements — consider jewelry, finished basements, home office equipment, or water backup coverage.

5. Schedule a policy review every 2–3 years, or sooner if you’ve made improvements.

Questions to Ask Your Agent

• Does my dwelling limit reflect today’s rebuild costs in Wayne/Northern NJ?

• Is my policy actual cash value (ACV) or replacement cost?

• Are my valuables fully covered, or do I need an endorsement?

• Am I protected against water damage from sump pump overflow or sewer backup?

• If my home were a total loss, would my policy truly cover the full cost to rebuild?

Bottom Line

Insurance isn’t the most exciting part of homeownership, but it’s one of the most important. With home values rising across Northern NJ, now is the perfect time to check if your coverage is keeping up.

It only takes a quick call to your agent — and a little peace of mind goes a long way.

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