Can you afford to replace your home?by Tim Manni
When you’re considering how much home insurance is adequate to cover your home, is it best to consider how much your home is worth or how much it would cost to replace? The experts at Insure.com say it’s absolutely the latter.
Given the state of home prices in this country, the costs to rebuild your home can far outweigh what your home might sell for on the current market.
“Too often, homeowners don’t learn they’re underinsured until after a catastrophe, when the payout from the insurance company isn’t nearly enough to rebuild the home,” wrote Mila Maxwell of Insure.com.
Insure.com recommends homeowners find out just how much it would cost to rebuild their homes. Insure examined two online tools that do just that, but you’ll have to read their article to learn more about their results: “How much would it cost to replace your home? We test two online estimator services.”
“Two-thirds of homeowners are underinsured,” said Amy Bach, executive director of United Policyholders, an insurance consumer advocacy group based in San Francisco. A recent report even revealed that many homeowners are underinsured by a few hundred thousand dollars.
Why am I underinsured?
Your home can be underinsured for any number of reasons, including:
- You never gave your home insurance much thought beyond keeping up with the monthly payments
- You’ve never found out what your rebuilding costs might be
- You failed to contact your insurance company after you made certain home improvements or renovations
- Construction costs have risen
- Your policy may never have been adequate from the start
To learn more about how you can review your home’s insurance policy and rebuilding costs, as well as how to add to and improve upon your current policy, be sure to continue reading, “How much would it cost to replace your home? We test two online estimator services.”