 |
Today is Wednesday Mar 10, 2010 ·Welcome · Buyer Beware · Free Room Makeovers · How We Screen Companies · Homeowner Advocate Email Newsletter 
|
|
Meet Featured Vendor ...
... And Find More Quality Vendors Below:
|
Most new policies make it the homeowner's responsibility to make sure their coverage keeps pace with increases in rebuilding costs. Unfortunately, homeowners often don't realize that and it can cost them thousands.
The biggest mistake people tend to make is to base their replacement-cost estimates on the house's market value. The amount of money someone would pay for the house has absolutely nothing to do with the house's replacement value.
As construction costs rise, so will your replacement cost. According to the Census Bureau, the cost of building a home rose 33% in the West. Other costs often overlooked are demolition costs to clear the property or remove debri as well rebuilding to code.
In case studies we researched, one homeowner did not have coverage for the expenses of meeting updated building codes. The homeowner was faced with paying upwards of $12,000 for wiring, plumbing and structural repair not covered by the insurance. Add an "ordinance and law" rider to your policy to cover the extra expense of rebuilding to code.
You don't want to insure the value of the land. Your tax assessment will give a breakdown of the land and house values. In addition to rebuilding costs, you do want coverage for the landscaping and contents of your home.
In another case study, the homeowner thought they were adequately insured, but the coverage was $80,000 short of the actual rebuilding and landscaping costs. The homeowner had to make up the difference. The new home did not have all the "extra" features of the original home.
Your real replacement cost will vary depending on the quality of the materials in your house and any special architectural features. All features of the house should be taken into consideration from granite counter tops to roofing materials. Square to foot measurements to set home values don't take into account differences in housing materials. Additionally, hire a contractor, an appraiser or an expert in building repair to help you determine a replacement cost value, and work closely with a qualified insurance agent who is willing to take the time with you.
Contact Editor
Showcase of Services Home Page / Pre-Screened Company Directory Newsletter / Buyer Beware / Experts / Articles / Free Room Makeovers Legal Disclaimer |
|
Many homeowners are under the impression that their insurance will pay the full cost of replacement if their houses sustain extensive damage from fire or other causes. Yet, industry statistics cite as much as three-quarters of all homes nationwide are under insured. Mortgage lenders typically require that borrowers purchase a minimum amount of homeowners insurance .. not necessarily the amount of coverage you truly need.
2003