Make sure the insured value of your home
keeps up with your home remodeling plans.
While stuck indoors this winter, did you look around and plan any home projects? Whether you do it yourself or hire a contractor, remember to update your homeowner insurance as you increase your home’s value.
The Coverage A limit on your homeowner policy is the amount of insurance you have to reconstruct your home in the event of a total loss. All costs associated with replacing or rebuilding your home are considered when developing this Coverage A limit. When you make changes that increase the value of your home, you may also need to increase the coverage limit.
An inspection can help identify special features in your home.
Many people don’t know where to start to estimate home value when purchasing homeowner insurance. For some, the first instinct may be to insure the home based on mortgage value. Others may look at real estate market value, property tax basis or some other factor. But any of these values could be far less than the actual cost to rebuild, and that is the key consideration when buying insurance to protect against a loss.
There is no way to guarantee the cost to reconstruct your home in the event of a loss at some future date, but there are a couple of tools that can point you in the right direction. Read More
Think about coverages you may need for an older or historic home.
You may find an older home appealing because of its size, grandeur and location. But before you leap into the refurbishing trend, look at how older homes can present challenges that could increase your insurance costs.
After World War II, tract homes became the norm as the construction industry standardized materials and techniques. As a result, features found in homes constructed before 1945 became “custom.”
Custom features can add to rebuilding costs.
“I could never sell my house for that!” How many times have we heard this said or even said it ourselves? It’s easy to experience sticker shock when we see the value our insurance company wants to place on our home.
Calculating replacement cost ̶ or more accurately, reconstruction cost ̶ is often a complicated process, and results can deviate widely from market price. It’s not unusual for rebuilding costs to be significantly higher than the cost of new construction.
Reconstruction cost is the cost to hire a contractor to replace the home as it is, in today’s marketplace using materials and design of similar quality. While the cost of materials plays a significant role in determining the valuation, many other factors need to be considered but often are overlooked. Read More