| Peter Lynch once said, "Before you do invest | | | | bank will require a property valuation report unless |
| anything in stocks, you ought to consider buying a | | | | the property is totally new. In every property |
| house, since a house, after all, is the one good | | | | valuation report, there are always 3 values of the |
| investment that almost anyone manages to makes." | | | | property stated apart from the purchase price of the |
| There is no doubt about that statement made by | | | | property; |
| Peter Lynch, as buying a house for their children and | | | | |
| loved one is every person's dream. For most people, | | | | 1. The Market Value of the property |
| the first and probably only property investment has | | | | 2. The Force Sales value of the property |
| become their biggest investment and it carries a | | | | 3. The Insurable value of the property. |
| huge responsibility which includes their obligation to | | | | More often than not, the insurable value of the |
| service their mortgage, paying taxes and maintaining | | | | property is between the market value and the force |
| their property. One of their many challenges is to | | | | sales value. This insurable value represents the |
| protect them from suffering of financial losses due to | | | | amount of cost that the property will need to rebuild |
| unforeseen circumstances such as fire damages, | | | | in the even of a total loss after an insured peril. |
| naturally disaster and many other perils that could | | | | Most property owners including some mortgage |
| happen without any warning. | | | | officers always confuse with the purchase price and |
| Purchasing an adequate insurance coverage for their | | | | insurable value, they often take the purchase price or |
| property is thus of utmost important. Many new | | | | market value as the sum insured of the property |
| house buyers have face the problem of deciding how | | | | when arranging for the insurance. While this is a |
| much is enough to cover for their property. Insuring | | | | common practice, the owner is paying extra premium |
| too high, will be a waste of premium as insurance | | | | unnecessarily. |
| company would not pay anything higher than its | | | | A more accurate way is to ask this question, "If my |
| actual cost. Insurance too low, will run the risk of | | | | property is totally destroy, how much money I will |
| being under insured whereby they would have to | | | | need to rebuild it to the same condition before the |
| bare the proportionate cost of repairs and | | | | loss?" And the rebuilding cost will generally exclude |
| reinstatement of the property to it pre-damage | | | | the land, drainage and sewage and foundation which |
| condition. | | | | seldom destroy after the insured perils, unless of |
| One of the simplest ways is to follow the Property | | | | course the damage is caused by a catastrophic |
| valuation report, most properties if mortgage to the | | | | earthquake. |