Adjust my property insurance when value increases?

[Dan Tsunekawa]

Hello BP!

I was looking at my insurance coverage on my san diego rental yesterday and i noticed the replacement coverage is way closer to the purchase price from several years ago. close to $300k, where as the value today is probably closer to $450k. Is this something that we need to be monitoring as investors to make sure our coverage stays aligned with market appreciation?

Thanks in advance

[Dan H.]

@BreAnn Stephenson hinted at this but sometimes market value and replacement costs do not correlate well.  For example a few years ago San Diego RE appreciation was 20% for the year but replacement cost likely went up less than 5%.  

So you do need to make sure you have the appropriate coverage but market value increase is not really the primary factor in determining if you have adequate coverage.  

Your insurance agent should be able to assist you in determining appropriate replacement costs.  

Good luck