Call: 203-637-6655 or email – Kyle Shepard

Why is my house insured for $2.8m when I couldn’t sell it for $2m?

This is the question we field at Shepard Insurance Group daily from our clients.

Unfortunately the answer is one you won’t want to hear.

Over time, property values have softened for real estate sales, the number of buyers has reduced, and appetites have changed. In what is termed a buyers market, property values have come down as the new normal for real estate.


“Why is my house insured for $2.8m when I couldn’t sell it for $2m?”


But construction costs, whether renovations or building from the ground up, continue to escalate. In turn, this has put values for purchase vs construction out of whack.

So as it relates to how much insurance you need to rebuild your home, you have to focus on construction costs. Those costs have escalated by more than 5% in just the last 12 months alone.

And let’s not forget, if you have a property damage loss, you lose control of time. You need those repairs or need to rebuild now and that has a significant impact on what your insurer will pay in the end. As the saying goes, time is money, and when it comes to construction, costs jump 25-40% when you need it done now.

Forty years as an agency implementing insurance policies for homeowners is test on claim values.

If you have a concern on how your home is insured call Kyle at Shepard Insurance at 203-698-9341 or email him at, he has the answer you may need.

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