How Is the Value of a Home Estimated for Rebuilding Costs?

Many people don’t think about a total loss of their home. It seems far-fetched. Yet, it is not uncommon for homeowners to experience what insurance agents term a total loss.

A fire could damage your home so much so that it is impossible or too expensive to replace. You may face losses when a tree falls on your home’s roof, damaging the structure beyond repair. When a covered incident occurs and the home insurance agency says the home is a total loss, you’ll rely on that policy to help you rebuild. But, will it provide enough coverage for that?

Not All Policies Cover Construction Costs

Home insurance plans do not always provide enough funds to rebuild the home. If your home has actual cash value coverage, that means it will pay you what your home’s worth is at the time of the loss, up to the limit on the policy. This probably isn't enough coverage. The cost to rebuild your home is significantly higher than the market value of your home.

Most homeowners should have coverage to rebuild your home.

How Do You Calculate the Rebuild Cost?

Having this information is valuable. You cannot assume your home insurance will pay enough to cover rebuilding in a total loss. Consider these tips to help you determine what the true rebuild cost will be:

• It’s best to use a professional surveyor to conduct a survey. It’s not usually excessively expensive, but it can help you to learn what the cost would be. Ask for a rebuilding cost assessment.
• You’ll find some rebuild cost calculators online you can use. However, these are only beneficial in a limited capacity. The cost to rebuild is very much a local factor. You’ll also have to provide specific measurements of most of your home.
• Talk to a local builder. If they are building homes in your area, ask about the cost of rebuilding a home like your own. Within a few conversations, you’ll likely have a good idea of what you can expect.

Also, work with your home insurance agent. He or she can give you information about local builds and help you to understand what cost factors play a role. For example, if a storm damages homes in your area, the price of materials will suddenly skyrocket. That will make it even more expensive to rebuild. The right policy will cover these unexpected costs.

Are you looking for home insurance? Look no further. Avanti Associates can get you the best rates to meet your home insurance needs. Go online for a free quote, or call (914) 273-8511 with any questions.