Your homeowners insurance policy is meant to bring you back to whole if a claim were to occur. In other words, the insurance company will not replace your 1000 square foot home with a 1500 square foot home or provide you with a stick built house in place of your manufactured home. So how do you figure out what the cost would be to reconstruct your residence? It’s really not that difficult. Listed below are some tips that will help.
Your home’s appraisal, or selling value, really will not correspond with your coverage amount. Many customers have a hard time with that, but you need to understand that your lot size, neighborhood, school system, etc. effects an appraisal value. We are trying to discover a construction cost.
When you call for a quote on your home know the finished square footage and unfinished square footage (usually a basement) of your home. Have information available such as; style of home (ranch, tri-level, two story), if you have an attached garage, what flooring types to you have (tile, carpet, laminate), is there any masonry work on the exterior of your home, number of porches/decks, over all quality of home (economy, standard, high end), type of roof, when was your roof replaced, what year was your house built, are there any upgrades to your plumbing or electrical systems.
Insurance agents have a system calculator that uses your zip code and the information that you give them to tabulate a construction value. Usually this value is a little on the high side to be safe, but it gives you an excellent tool for figuring a good coverage amount. You can always call 3 different agents and compare the amounts that they give you.
You can also request that Guaranteed Replacement be added to your policy. (Your mortgage company may have already checked for you). This gives you an additional 15%, depending on the company, of coverage as a safety net.
Please note that your dwelling coverage is for your home and attached features only. If you have a large detached garage or pole barn make sure that your detached structures coverage is sufficient.
As for personal property, usually it is a certain percentage of your dwelling coverage amount. If you have items of high value you may want to bump the coverage up or list them separately under an inland marine policy. I see this most with collectibles and jewelry. The nice thing about an inland marine policy is that it gives you a great deal more coverage on a certain item. If you insure your engagement ring and the stone simply falls out, reason unknown, it will be covered.
Well, that’s an overview on your dwelling coverage amount. Agents are paid to answer these questions for you. If you don’t feel comfortable with your agent or don’t trust his/her advise, find a new one. You have the right to fully understand your policy and all of it’s coverages.