Whether you’re buying a home in North Carolina or selling your old one, appraisals are an important part of the process. It determines the value of real estate so you as the buyer or seller can expect to spend or earn. Because of this, lenders also use appraisals to determine which mortgage plan is right for you. However, its importance to insurance is often overlooked.
Here’s how real estate appraisals affect your insurance.
The Appraisal Process
To understand what real estate appraisal does to your homeowner insurance, it’s important to know its process first. According to the Insurance Appraisal and Umpire Association, both the insurer and the homeowner will pick their own independent appraiser to inspect the home.
They will inspect and grade the contents of the property and compare it to similar houses in the area to determine a value. Both appraisers will then compare their work and come up with a final value. If both parties cannot come to an agreement, then an umpire (usually a district court judge) will evaluate both studies and make a final decision on how much the house is worth.
What it Means For Your Home Insurance
An appraisal is usually called for when you and your home insurance provider don’t agree on your coverage. For one, you could be paying too much for what your home really needs. Another reason would be that you think that the cost of repair or replacement is too high. In any case, an appraisal will make sure you’ll be on the same page with your insurer without going to court.
How it’s Different from Inspections and CMAs
If you’ve sold an old house before, you’re probably familiar with a “comparative market analysis” (CMA). It may look like an appraisal, but it’s more of a way for real estate agents to set selling price expectations for their clients. It is not done by a licensed appraiser.
Home inspections are a lot like appraisals, too. Inspectors check every corner of your home and come up with a report about the possible problems it has. The difference is that inspections are usually done to determine what needs to be fixed, while appraisals are done to determine the value of the house. Both reports, however, can be used as evidence for your claim.
How to Choose the Right Appraiser
If you’ve decided to get your house appraised, you’ll need to hire a professional to inspect your home. If you’ve had your home appraised for a lender before, ask them to inspect your home again. You can also ask your real estate agent to recommend a local appraiser for the type of home you have. Reach out and talk to as many appraisers you can. You’ll need someone who has a license, experience in appraising your property type and knows their way around local law.
Getting your property appraised can be a long process, especially if you need to cover for big repairs or replacements. What’s great about it, though, is that you get to determine the exact coverage you need for your home. It’s also beneficial for the insurer because they’ll get to consistently provide the service you need. They’ll also get a better understanding of property values in that area for future customers. It’s always good to find common ground.
Get Complete Insurance Coverage
As much as you keep your home in tip-top shape, there’s always a chance that it’ll get damaged. At Amistad Insurance, we understand that it’s important to keep you and your home protected from damages that storms and other natural disasters can do. We offer comprehensive coverage at reasonable rates. Contact us today to get complete coverage.
