When selecting home insurance, look closely at the details of the plan. While you may not realize the impact it can have, whether or not your policy provides a replacement cost level of coverage can impact you significantly in the long run. Some policies do not include rebuilding costs. Rather, the policy pays out at the actual value of the home, not the cost to rebuild it. These are very different factors, though. If your home is a total loss, such as due to a significant fire, you'll want to have rebuilding coverage since it helps ensure you can replace your home.
What Makes This Different?
Your home's actual value is the value of your home as it is. It includes the contents as well as the structure itself. However, it does not provide you with the coverage you need to rebuild. If your plan does not offer this protection, you may be forced to pay these additional costs to rebuild your home. These are costs such as:
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The cost of construction overruns
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The cost of adding specific features onto your home
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The cost of demolition and cleanup
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The cost of architect labor to design a new home
The list goes on and on. On the other hand, if your policy covers rebuilding of your home in the event of a total loss, you won't have to think nearly as much about these financial limitations.
How Much Do You Need?
It's impossible to provide a specific percentage or dollar value associated with replacement cost because every home is very different. Rather than guess, ask your independent insurance agent to create an estimate of the home's replacement cost. You can also talk to your local builder association or a contractor that you know well as trustworthy. Don't assume you can guess the value of your home and don't assume your home's current value or appraised value is enough.
Take a few minutes to look closer at your home insurance plan. Does it provide you with comprehensive insurance to not only cover your losses but also help you to rebuild your home should it be a total loss? If not, upgrade to a policy that does for your long-term protection.
Do you have enough coverage? Call Remco Insurance at 800-282-2000 for more information on Austin home insurance.