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Important reminders from our dedicated Insurance partners, Realogy Insurance!
Did you know that the market value of your property and the insurance value are different? The cost to rebuild your property is related to the size and construction type of your home, and the market value includes the land and property values of the neighborhood. When purchasing a new home, it’s important to insure the property to its full replacement value in order to be able to rebuild in the event of a loss.
How much will it cost to rebuild? Inflation has increased both building materials and repair costs. When you factor in project delays, labor and supply chain issues, rebuild costs have significantly increased. What does this mean for you? It means that in the event you need to rebuild your home, it is going to cost you more than it did previously. Most policies provide replacement cost coverage – repair or replace damage with materials of similar kind and like quality up to the limit of your policy. It is important to work with an agent who insures your home to 100% of the estimated replacement cost using updated calculations.
What other coverage should be considered? Let’s take a look:
Extended replacement cost coverage – if available, this endorsement will provide 25% or more in additional coverage over your limits which could be needed if labor and materials fluctuate.
Ordinance or Law coverage – if your home is severely damaged, you may need to meet new building codes which are often stricter when you go to rebuild or update. This coverage pays a specific amount toward these costs.
Water back-up – if water goes in the opposite direction of what it should, drains will back up and cause water damage. This coverage pays when a loss is caused by water which backs up through or overflows from a sewer, drain or sump pump.
Loss of use- coverage to live outside of the home if it is not inhabitable after a loss.
Now that the house is covered, what will it cost to replace ALL your possessions? Think of taking your house, turning it upside down and shaking everything out of it. Imagine having to replace everything that fell to the ground. The good news is a properly written homeowners insurance policy covers the contents of the home. Be sure to purchase replacement cost coverage for your personal property rather than actual cash value. If a fire destroys a 5 year-old television, a replacement cost policy will pay to replace the TV with a comparable new one while an actual cash value policy will only pay a fraction of the replacement cost because it factors in the 5 years of use. If in the unfortunate situation of having to replace everything, you want to be able to do so without having to worry about depreciation.
Protect your largest investment – your home – and be sure that you’re insured properly. Click here to schedule a FREE insurance review! My partner offers one-stop shopping for multiple price points and coverage options.
