Is Your Home Insured to Its Replacement Cost?

Is Your Home Insured to Its Replacement Cost?

If you lost your home in a fire, how much would it cost to rebuild it? The answer may be different than you think. And if your home isn’t insured to its full replacement cost, your homeowners policy may not cover the full cost for you to rebuild it in the event of a covered loss.

Rebuilding costs could differ from what you paid for your home and be more than its current market value – what it would sell for today – especially in areas where the value of real estate has changed. A replacement estimate includes costs to rebuild your home component by component. Current costs for labor, materials and contractor fees may influence the replacement cost of your house.

Some key factors that affect the cost of rebuilding a home:

Total living area (square footage).
Style of home (e.g., ranch, contemporary, colonial).
Construction type (e.g., frame or brick).
Number of kitchens and bathrooms.
Quality of custom materials.
Garage type (e.g., attached, detached, built-in).
Special features (e.g., fireplaces, porches, skylights).
Additions or enhancements (e.g., finished basements or in-law apartments).
It’s important to have a current estimate for your home’s replacement cost, one that reflects any significant improvements that you have made to the house. For example, if you installed a central air conditioner or finished your basement after you took out your insurance policy and never updated the replacement cost, your home might not be fully covered in the event that you need to completely rebuild following a covered loss.

Here are some steps that you can take:

Talk to your agent about the dwelling coverage on your homeowners insurance policy.
Talk to your agent who have tools to help estimate your home’s replacement cost.
Check in on your home’s replacement cost yearly, especially after making improvements to your home. Remember, even small improvements can affect the cost to rebuild your home.
Making sure that your home is insured to its full estimated replacement cost is another way to help protect your home and the things you’ve worked hard to build.

Information You May Need for a Homeowners Insurance Quote

Information You May Need for a Homeowners Insurance Quote

Getting a homeowners quote can only take a few minutes when you have all of your information at hand. Knowing the details of your house, including what kind of safety features you have installed, may help you qualify for money-saving discounts and help ensure that you choose the coverage that meets your needs.

There can be more questions involved in getting a homeowners quote than a car insurance quote, so it can be helpful to gather your paperwork and be ready to answer specific questions about your home in advance. Here’s a checklist to help you get started.

Who lives at your house? You may be asked for contact information about you and anyone else who lives at your house, how long you’ve lived there, your marital status, whether you run a business from the home and whether you own a dog or any pets.

What’s your insurance history? It’s good to be ready with details about your existing coverage, if your home is already covered by homeowners insurance. Do you have a mortgage on the home? Are there any prior insurance claims? How much would it cost you to rebuild your home?

What’s your house like? You’ll likely be asked a series of questions, including the year your house was built, the type and age of the roof, the style of the home, its exterior finish and whether or not you have a garage. You’ll also probably want to know the square footage of your home and may be asked for details on the number of bathrooms or fireplaces. This information helps determine the cost to rebuild your home and may help with determining the amount of coverage that fits your needs.

What improvements have you made? If you have made upgrades to your home since you bought it, such as replacing the roof, installing a central air system, finishing your basement, remodeling a kitchen or other updates that increase the value of your home, your existing homeowners policy may not reflect the current value and replacement cost of your home.

What kind of safety devices do you have? If you have certain safety devices, including smart or connected home technology, a security system or fire sprinklers, you may qualify for a discount on your insurance.

Having all of this information ready to go can make it easier for you to get a quote and can help you get coverage to protect you and your family that fits your needs.

Cyber Liability

Nearly half of businesses in study hit with cyber attack in last year

Almost half of about 4,000 businesses surveyed have suffered some sort of cyber attack in the past year, according to a report from Bermuda-based insurer and reinsurer Hiscox Ltd. on Tuesday.

The second Hiscox Cyber Readiness Report, conducted by Cambridge, Massachusetts-based Forrester Research Inc., includes 4,103 organizations of varying size in the private and public sectors across five countries: the U.K., U.S., Germany, The Netherlands and Spain, according to a statement from Hiscox.

Of the organizations surveyed, 45% were hit by at least one cyber attack in the past year and two-thirds of those targeted suffered two or more attacks, the report said.

For those organizations targeted, the average cost to each business over the past year was $229,000, the report said.

Costs, however, escalated sharply in some cases. For the largest organizations surveyed, those with at least 1,000 employees, the average cost of an attack ranged from $356,000 in Spain to $1.05 million in the U.S., the report said.

Companies are moving to address and combat the threat, according to the report.

Almost three-fifths, or 59%, of respondents plan to increase their cyber security budgets in the year ahead, and new technology “tops the shopping list despite this being the area where the bulk of firms appear best prepared,” the report said.

The report also suggests that technology is just one component of a proper defense against attacks, saying, “Cyber security is not an IT issue but rather a risk for the whole organization; tackling it is more about people, behavior and culture than clever technology.”

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Posted On: Feb. 6, 2018 2:15 PM CST
Matthew Lerner