When's the last time you checked your home's insured value against what it would actually cost to rebuild from the ground up? If you're like most Amarillo homeowners, the answer is "not recently enough." The reality is that construction costs have surged dramatically over the past three years, and many homeowners in Potter and Randall County are sitting on policies that won't cover a full rebuild. Mid-year is the perfect time to close that gap.

At High Plains Insurance Agency, we run mid-year coverage reviews for our clients because we've seen what happens when homeowners discover they're underinsured—right when they need their policy most.

Why Home Values and Insured Values Diverge

Your home's insured value isn't its market value—it's the cost to rebuild the home from scratch at current prices. That number has moved significantly:

  • Lumber and materials: While lumber prices have come down from their 2021–2022 peak, many building materials (concrete, steel, drywall) remain elevated.

  • Labor costs: The construction labor shortage in the Texas Panhandle has driven up contractor rates. Amarillo roofers and builders charge 20–40% more per project than five years ago.

  • Code requirements: Building codes in Amarillo and Randall County have updated in recent years, particularly around energy efficiency and storm resistance. A rebuild may now require upgrades that didn't exist when your home was originally built, adding to the cost.

  • Supply chain factors: Even with improvements, delivery times and material availability in the Panhandle aren't back to pre-pandemic norms.

The bottom line: a home insured for $250,000 that was adequate in 2020 might cost $310,000–$350,000 to rebuild today.

The Underinsurance Trap

Most home insurance policies have a coinsurance clause (often called an 80% clause). This means that to receive full claim payment, your insured value must be at least 80% of the home's replacement cost. If you fall short, the insurer pays only a proportional share.

Example: Your home's true replacement cost is $320,000. Your policy covers it for $250,000 (78% of the replacement cost). A fire destroys the home. Instead of paying $250,000, the insurer calculates: $250,000 ÷ $320,000 × $320,000 = $250,000... but only because you're barely under the 80% threshold. If you were insured for $200,000 (62.5%), you'd receive $200,000 ÷ $320,000 × $320,000 = $200,000. That's a $120,000 shortfall.

That's not theoretical. We see this happen in Amarillo after major losses, and it's devastating.

What a Mid-Year Review Covers

When you schedule a review with us, here's what we do:

  • Recalculate your replacement cost based on current Amarillo construction rates, your home's square footage, age, materials, and unique features.

  • Review your policy limits against the updated replacement cost.

  • Check for coverage gaps — things like a detached garage, fence, or pool that might be underinsured or missing.

  • Assess your deductible — make sure it still fits your budget and risk tolerance.

  • Look for savings — bundle discounts, loyalty credits, or carrier switches that could lower your premium while maintaining or improving coverage.

Amarillo-Specific Cost Factors

Construction costs vary by region, and Amarillo has its own dynamics:

  • The Colony and Sleepy Hollow neighborhoods feature a mix of 1970s–2000s construction. Older homes may have materials that are expensive to match or replace (specific roof types, original brick).

  • Newer developments near Soncy and the west side use current building materials but often feature larger square footage and custom finishes that drive up rebuild costs.

  • Canyon and Randall County properties may include outbuildings, barns, or agricultural structures that need separate coverage.

Don't guess. Get the numbers right.

Schedule Your Review Today

A mid-year review takes about 30 minutes and could save you tens of thousands of dollars in the event of a claim. We're not here to upsell you—we're here to make sure your coverage matches your reality.

Call us at 806-476-9700 or stop by 4174 Business Park Dr, Amarillo, TX 79110. We'll pull up your policy, run the numbers, and give you a clear picture of where you stand.

FAQ

How often should I review my home insurance policy?


We recommend at least once a year, and any time you make significant home improvements, see major construction cost changes, or experience a major storm season. Mid-year is a great time for a check-in.

Will increasing my coverage significantly raise my premium?


Not necessarily as much as you'd think. Increasing from an underinsured level to adequate coverage might add $100–$300 per year, but the protection gap it closes is worth tens of thousands of dollars.

Does home insurance cover the cost of meeting new building codes after a loss?


Standard policies may or may not include "ordinance or law" coverage, which pays for code upgrades required during a rebuild. Many policies exclude this. We can add it as an endorsement.

How is replacement cost different from market value?


Market value is what your home would sell for, including the land. Replacement cost is what it would cost to rebuild the structure only at current prices. In Amarillo, land values and construction costs move independently, so these numbers are often very different.