Is Your Home Insured For the Right Amount?

If you’re in the process of building your home, you know the crazy costs that come along with it. In fact, building a home right now is one of the most expensive times in history. So, knowing how much time, energy, and money you’re putting into your home, we recommend to protect this investment adequately with a homeowners policy. You never know when a tragedy might strike.

Now, it’s important to review your policy and see if you would have enough to rebuild your house if there was a total loss such as a tornado or fire. Would you be stuck with some of the bills to build a similar house that you’re currently in?

Typical Home Policy

A normal homeowners policy will have an inflation guard included. This means that the insured value of a house will increase each year during renewal time somewhere between 4-8 percent.

Most insurance companies require appraisals after coverage is bound to determine the correct replacement cost. Some insurance companies allow an online replacement cost estimator. If you’re wondering if you have sufficient funds be sure to contact your insurance agent.

Home Renovation

Should a home renovation mean that you should change your policy? If you’re in the process of renovating your home or finished renovating, you definitely should reach out to your insurance agent to confirm your homeowners policy still has sufficient limits. Especially for the higher end finishes and additional spaces added to your home.

Common Misconceptions

A common homeowners policy misconception is that you should insure your home for the price you bought it. However, the correct way to insure your home is to base it off of the replacement or rebuild cost of your home. In fact, replacement costs for homes that are older tend to be higher than new build construction costs. It’s important to factor this information in as well.

Policy Options

There are other homeowners’ policy options. These options include extended replacement costs or guaranteed replacement costs on homeowners’ policies. An extended replacement cost will give you an extra percentage of the home value that helps with rebuilding if there was a total loss on top of what your home is already insured for.

If you have a guaranteed replacement cost, then the policy will not set a monetary limit on the potential payout for a total loss. Carriers will give these under the understanding that the homeowner is insuring their home the correct replacement cost.

Contact Us

This may be a lot to take in. The easiest way to make sure you’re covered is by contacting the insurance experts here at IBC. At IBC, we have a team on hand ready to help. Give us a call at 712-277-2424 or fill out this form online.