posted by TrueNorth Risk Management on Tuesday, February 1, 2022
Your home is likely the biggest investment you will ever make, and it’s important to understand your home insurance coverage options. When choosing the right policy – it’s important to distinguish levels of replacement cost. This is especially important after a potentially damaging severe weather event.
Is your home insured for its proper value?
You purchase your dream home for $500,000. The replacement cost is estimated at $450,000. Six months later, your home is destroyed due to catastrophic weather. Whole neighborhoods are destroyed. Demand, price for labor, and construction material costs soar, driving up the cost to rebuild. The actual cost to rebuild your home is now $1 million.
Homes are often under-insured, leaving insufficient funds to rebuild to the same specifications. A major loss to your home is traumatic enough, but to not be able to recoup rebuilding costs could be devastating.
TrueNorth can help identify which coverage is right for you. We can walk you through factors to consider when selecting a policy including:
- Market value: the amount you pay for a home, regardless of how much it would cost to rebuild
- Replacement cost: the cost necessary to replace or restore the entire home equal to its condition before the loss
- Extended replacement cost: Generally, pays to have your home repaired or rebuilt to its condition before the loss even if the cost exceeds the policy limit up to a capped amount.
- Guaranteed replacement cost: will pay to repair or rebuild your home to its original specifications regardless of the cost. There is no cap.
Reach out to us today to talk about replacement costs.
This publication has been prepared by TrueNorth Companies, L.C. and is intended for informational purposes only. Transmission of this publication is not intended to create, and receipt does not constitute, a client relationship with TrueNorth Companies, L.C. This publication does not constitute any type of representation or warranty, and does not constitute, and should not be relied upon as, legal advice. This publication is not a contract and does not amend, modify or change any insurance policy you may have with an insurance carrier. © 2022 TrueNorth Companies, L.C. All rights reserved.
In addition to helpful weekly guidance on home and auto, TrueNorth provides a number of insurance options to protect your family from risk. For information on a home or auto quote, visit www.iTrueNorth.com or call us at (319) 739-1277. We'd like nothing more than to help safeguard the things that matter most to you.
Obtain a quote on home or auto
Learn more about TrueNorth Risk Management
... read more about author