Home Insurance - Homeowners Insurance

Typical homeowners insurance cover damages that can result from wind storms, fire, weather like hail or tornado, water damage, explosions, riots as well as other losses stemming from break-ins and cost of living expenses wherever it’s being repaired or rebuilt. Your policy also covers you in case family members or guests are injured within or on your property including animal attacks and the like.

When you choose to insure your home there are two things that you are really insuring: Structure and belongings. The purpose of this article is to discuss what you should be aware of if you need to ever rebuild your property.

Your home owner’s insurance is structured in three ways to protect it.

Replacement Cost: Protects the holder of the policy by giving the full amount of the property that is not depreciated. Has a money cap.

Extended Replacement Cost: Covers a percentage over the actual cost of the property. This protects you against rising costs in construction or permits etc.

Actual Cash Value: Just like replacement cost except the home is depreciated.

It’s important to try and insure your home to its maximum value. Keep in mind to insure it for the amount it would cost for you to rebuild it. Without proper coverage your company may only pay a small portion of the replacement cost.

Here are some ideas to help in finding the right money amount to insure your home for.

Quick Estimate: Multiply building costs by the total square foot of your home. Call your local builders for current pricing. This will give you an estimate that can help you properly insure your home.

Determining Factors For Rebuild Costs: Construction costs, your home’s square footage, exterior wall construction, house style, attached buildings like a garage or fixtures such as a fireplace, roof type, number of bedrooms and bathrooms and any specialized features.

Check Policy Value vs. Building Cost Each Year: Check with your provider to see if they offer an inflation guard clause. With this clause in place your policy will automatically adjust when you renew. Keep up with building costs every year regardless in case you need to raise your coverage.

Check Community Building Codes: Minimum standards may need to be met if your home is damaged. You may have to rebuild and keep these codes in mind so your policy may need to be adjusted to suit.

Don’t Insure Market Value: Rebuild cost may be higher or lower than what you originally paid for it.

Cover Mortgage and Rebuild: Your home owners insurance should be able to pay for your mortgage but make sure it can cover costs to rebuild your home.

Adjust for Improvements: If you add-on or improve upon your property you should alert your provider.