This is a great question and one that our clients frequently ask.
For one thing, we believe that you should have an amount of insurance that is sufficient to rebuild your home - probably your largest investment - in the event it is totally destroyed.
In addition, your policy contains what is called an insurance-to-value provision. This is essentially an agreement between you and the insurance company. In exchange for your agreement to insure your home for at least a specified percentage of its replacement value, the company agrees to issue the policy for a lower premium then it would charge for a policy without this provision. After a loss - even a small loss - if the amount of insurance on your home isn't sufficient to satisfy your part of the agreement, then the insurance company can reduce the amount it would normally pay.
While it is your responsibility to establish the value of your property and select the amount of insurance for your policy, we can help with that decision and explain what you can do to avoid a loss penalty.
For more information contact the Thumann Agency: (972) 991-9100 Or use our quick quote form: http://thumannagency.com/business-insurance
Insuring Families and Businesses in Dallas for over 20 years.