Many of you are astounded when they buy a home for $175,000 and your insurance agent wants to insure it for $300,000 or more. The reason an agent would (and should) recommend the higher amount is because the cost to replace your home after damage from a fire, storm or some other tragedy is higher than the cost to buy another similar home on the market. This assumes, of course, that you have replacement cost coverage on your homeowner policy.
Following are several reasons that explain why rebuilding costs could be 30-40% higher than new construction.
We recommend checking with your agent every two to three years to request a new rebuilding cost estimate. If you don’t have replacement cost coverage on your homeowners policy, you should speak with your insurance agent about getting it. Not having replacement cost coverage could mean you end up with huge out of pocket expenses.
EMERGE INSURANCE AGENCY
Cecil Williams -