The most important issue in insuring your Northeast Ohio home is making sure that it is properly insured for its replacement cost.
On average, when a property is under insured homeowners have to pay 45% of costs to replace, repair or rebuild their homes when there is a loss..
Replacement cost (the amount needed to rebuild it as it exists with the same features, quality and location), is not the same as market value or mortgage amount. For example, a home that costs $196,000 to rebuild might sell for $156,000. The home should be insured for $196,000. In the event of a loss, the insurance company will pay to rebuild or repair the home, not purchase the home. Physical features, cost of local construction and square footage are all part of what an insurance company looks toward when determining replacement costs.
Buyers often question a higher replacement cost value, wondering why they would insure for replacement costs when they would just “walk away if there were a complete loss and not rebuild”…this is not always an option. Also, what happens if there is a significant loss, such as a fire, the home is not a complete loss? In many cases, the claim exceeds the coverage. In that case, homeowner will have to pay the excess! So the best advise is to make sure that you connect with your home insurance agent to cover total replacement cost of the home. Most insurance agents will sit down with you with a checklist to complete a full analysis to make sure you have the full rebuild and loss cost. If you are in the area and need assistance connecting with an insurance agent, give me a call
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