How Do Insurance Companies Value Your Home?
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How Does an Insurance Company Value My Home?

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How Does an Insurance Company Value My Home?


One of the most significant purchases you can make is a home. Therefore, you must ensure this investment is well protected, which includes purchasing homeowners insurance. However, the way policies are handled varies from provider to provider. Learning more about the company’s procedures, including how it determines value, is essential to avoid costly mishaps.


Older homes may have more room for your family or provide sentimental value due to their location, size, or other aspects. However, insurance companies typically view older properties as greater risks in terms of claims. The repairs you’re more likely to need could differ from those for a newer home with less wear and tear. You can expect your premiums to be higher when insuring an older house. 

Despite age, there are some advantages you can experience with an older home, particularly those built with brick, stone, or concrete. Providers see these properties as more fire-resistant and valuable. As a result, they might offer lower premiums, regardless of the year the home was built.


Even the most beautiful homes with ample space and perfect interiors can have less value than smaller properties in different areas. A home’s location plays a crucial role in its value because some neighborhoods have higher crime rates than others, increasing the odds of theft and other avoidable incidents that lead to property damage. 

The house’s location will also be a prominent factor in terms of its distance from community events, buildings, and safety services. For example, low-value locations may be further away from shopping malls, concerts, sporting venues, or fire stations than homes in higher-value communities. As a result, they are deemed less valuable by insurance providers. To avoid these issues, research the property and weigh the pros and cons.

Roof Materials

This may not seem crucial to most buyers, but the level of protection your home has against hazardous conditions like hail, fire, and wind could be essential when determining property value. Most insurance companies want homeowners to replace their roofs every 20 years, but this will vary. Ask about these facts before purchasing a previously built property to avoid cash value issues. 

You will have a new roof with a recently built home, but the roofing materials will still affect your house’s worth. The shape of the top and its condition are reviewed by insurance providers when determining your coverage and costs. Providers consider the costs to replace, rebuild, or repair roofs, which involves materials that generally consist of metal, slate, tile, asphalt, or wood.

Housing Market Trends

Nearby sales are also a predictor of a property’s value. Although you may have purchased your home for a higher price years ago, the property may have lost its worth over time, causing insurance providers to lower the valuation. Always research the current market value to see the prices of local homes. If buyers have access to lower-priced properties, the value of yours could drop significantly. However, current market trends may also increase your property value, leading to a higher insurance valuation. 

It’s essential to make sure to buy your homeowners insurance from a trustworthy, experienced provider. For reliable, affordable home insurance, San Diego homeowners know they can trust Altra Insurance Services. We also provide renters, commercial, motorcycle, and auto insurance. San Diego residents can receive a free quote by calling one of our friendly agents today at (619) 404-6311.

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