With the recent wildfire events of California, it is more important than ever that home owners carry adequate replacement coverage for their home. Typically, when people think of what their home is worth, they tend to consider either what they paid for it or the price they can sell it for on the market. However, the insurance replacement cost is vastly different than market value.
While market value is important, insurance carriers are more concerned with the replacement cost of the structure itself. They want to provide an accurate valuation for the amount it would take to rebuild your home from scratch in the event of a total loss. There are several key factors that are involved in determining this figure which can differ from the market value. To show some components that are a part of determining the replacement cost for insurance carriers, we have included below:
- Permitting and architectural fees
- Codes requirements and regulations in the city the property is located
- Type of roof on the home
- Current cost to rebuild with all materials and labor
- Style of your garage and if it is attached or detached
- The cost of debris removal
- Exterior features, porches, balconies, breezeways etc.
- The age and quality of your heating and cooling systems
The aforementioned items are a small number of factors carriers take into consideration when determining the dwelling coverage. It is important to know that the replacement costs can change during the life of your home so remember to review this coverage with your agent.
Don’t be caught in the unfortunate situation of finding out your home was underinsured after a loss. At Hatter, Williams & Purdy Insurance, we can assist by reviewing your replacement value and ensuring you have the correct amount of coverage on your home, so that you and your family are protected in the event of a catastrophic event.