If you own a home, you probably have a homeowners policy that might cover all of the costs associated with rebuilding if something were to ever happen to your house. This could be damage from hail, fires, or even from random debris. But how can you be sure you have enough coverage? Here are two common situations you may not know about, and an affordable way to protect against them.
For Large-scale Home Repair: Look at Extended Dwelling Coverage
According to Safeco, “reconstruction costs are different from market value,” so your current homeowners policy may not reflect the true costs of rebuilding your home. Extended dwelling coverage can help you rebuild your home if construction costs change and end up being more than your current policy limits. So why doesn’t your homeowners policy always guarantee 100% coverage of the repair costs? This is because your house is insured for 100% of it’s replacement cost based on the value of your home when you first purchased it.
Now, imagine that the majority of the homes in your neighborhood experience flooding due to inclement weather or a back up in the sewer system. Because of the higher demand for construction materials and labor to fit the everyone’s damages, the cost to repair your home could increase. These price increases could put the repair value of your home at higher than what you initially paid for it, meaning your current homeowners policy would not cover all of the costs and you would be left with the remaining difference.
Rebuilding in Accordance with Building Code: Look into Building Ordinance or Law Coverage
If your house is damaged by a covered loss and needs to be rebuilt or repaired, the additions you make are required to be built according to current building codes. These codes have been updated frequently in the past couple decades and are now stricter. This means you could be looking at a larger rebuild cost than you previously anticipated. This is where your building ordinance policy or law coverage would come in which can give you thousands of dollars to apply to the new building code requirements. Without this additional coverage, you could be paying more to update your already brand-new build.
Both of these situations occur quite frequently, and they can take homeowners by surprise. Extended Dwelling and building ordinance policies can protect you from gaps in your coverage in the case of an unforeseen covered event. If you are looking to learn more about your risk or what your options for both Extended Dwelling and Building Ordinance are, give us a call or shoot us a text at 770-755-1775.