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Do I Need Higher Limits on My Homeowners Insurance?

Jodi DeSantis, managing director of insurance sales at AAA Northeast, sheds light on this question.

(Photo: 7romawka7 / iStock / Getty Images Plus)

My home value went up. Do I need higher limits on my homeowners insurance?

A: Homeowners insurance is intended to help you replace your home and possessions, so your limits are based on replacement value, not market value. Facets of market value – a trendy neighborhood, good schools, homebuyer demand – don’t affect what it would cost to rebuild your home as it exists today. Home improvements like an addition or a new kitchen, however, could impact your market and replacement values and would be a reason to raise your limits. Increased demand for home construction in your area can also impact replacement costs because of higher-than-usual labor expenses. Staying in regular communication with a skilled insurance agent is the best way to ensure you have the coverage levels you need.

— Jodi DeSantis, managing director of insurance sales, AAA Northeast

AAA insurance agents can answer any questions you have about homeowners insurance. Learn more at


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