Many people assume when there is a catastrophic loss on their home, rebuilding will cost the same as the sales price of that home.  Wrong.  An existing home’s sales price is based on its market, not the cost of building it and houses are more expensive to replace over time.  Even if an adjustment is made for cost inflation, homes are more expensive to build – think energy efficiency and upgraded flooring and counter tops among other new higher building costs.  That means insurance, which only covers the mortgage loan amount or the purchase price of the home may seem like the better insurance deal, but can leave you short of funds if ever faced with complete loss from fire, hurricane or other covered disaster. 

CoreLogic’s Insurance and Spatial Solutions principal, Guy Kopperud, reminds us “The recent extreme wildfires in California underscore that close enough is no longer good enough when it comes to keeping reconstruction costs current and accurate. Furthermore, while a carrier may decide to absorb the cost of underinsurance in good faith on a single property, they are less likely [to do so] when a large-scale loss occurs, forcing the coverage shortage on to the property owner.”  This only emphasizes the importance of being fully covered regardless of your location.  With the increase of natural disasters in populated areas, it is up to you to make sure you have insurance that will allow you to rebuild if you need to.

Agents through, strive to match affordability with coverage needs.  You need enough coverage that you have the peace of mind knowing you can build a new home if needed.  You are protecting yourself and your family, and we can help you do that.

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