17 Nov Homeowners Insurance Options That You May Not Know About
Most people purchase a homeowners insurance policy thinking it will cover most, if not all, of the different types of damage to their homes and other dwellings. Some mistakenly believe that they have enough insurance coverage to protect themselves from any amount of financial loss. The fact is, many are actually underinsured and don’t have sufficient coverage in place to protect them if their home is damaged to the point where it must be rebuilt. Understanding the different types of home insurance coverage will help you determine how much you will need to care for your needs if an unfortunate situation arises.
Extended Dwelling Coverage
The cost of building your home 20 years ago and the cost of building it today will be vastly different. Extended dwelling coverage gives you what you need to bridge that gap. For example, if you have your home insured for its current market value and it costs $30,000 more to rebuild it, the extended dwelling coverage will ensure you have the additional funds to rebuild your home. Not only does it bridge the gap with funds, but it will also give you a sense of financial security that you can rely on during very stressful times.
Rebuild According to Local Codes or Laws
When your home is damaged due to a loss that is covered under your homeowners’ policy, you must rebuild your home in compliance with local and state building codes. Building ordinance coverage will help you remain in compliance so that your home is up to code once it has been rebuilt. Much like extended dwelling coverage, building ordinance coverage is the best way to ensure that you have the necessary funds required to rebuild your home without worrying about exceeding the limits on your policy.
Understanding the Difference Between Current Value and Replacement Cost
When purchasing a homeowners policy, many people don’t realize the difference between their homes’ current market value and what it will cost to rebuild them. Unless your home was built within the last two to three years, its current market value might not be close to what it will cost to rebuild it using the materials being sold today. The cost of building materials increases each year. This is why having extended dwelling coverage and building ordinance policies are so important.
Understanding your homeowners’ insurance doesn’t have to be confusing. Call Kevin or Marci at Kevin S. Dougherty Insurance Agency, LTD to get the answers you need. We will explain each type of policy so you know exactly what coverage you have and what amounts you need to be financially secure. A homeowners insurance policy is not just supposed to provide peace of mind; it is also intended to provide you with the means to rebuild your home without causing you financial hardship. Contact us today to learn more!