Real Estate insurance

Real Estate Agent with Harrington ERA,DE Homes For Sale, $$ Save $$ Buy Today !

Q. How much delaware real estate insurance do I need to protect my home if it is ever destroyed?

A. Over 70% of the homes in the USA are underinsured and, of those homes, 70% are underinsured by at least 30%. This is a major problem! The confusion between market value and replacement value is where many of these problems originate.

Many people base their insurance coverage on the market value of their home. Market value is what a buyer will pay for your property, but this is irrelevant if your home is destroyed. What you should really be basing your coverage on is replacement value.

When computing replacement value you must figure in all of the costs of rebuilding your home. This can be 20-30% more than new construction because of the added cost of demolition and removal. Once the land is cleared, you must then compute the cost of rebuilding by multiplying the square footage by the average building cost per square foot. Talk to several contractors or your local builder's association to get an idea of what those costs can be.

Then you need to add in the costs for any upgrades and improvements you want to make. Also, check local building codes to see if any new codes have been added or changed that could affect the cost.

In some cases it may cost more to rebuild a home than the market value. This is often the case in run-down areas where land values have fallen. In any case, don't just base your insurance coverage on your lenders insurance requirements. These often only cover the mortgage balance leaving you with nothing to rebuild.

Talk to your insurance provider before deciding on your coverage amount and if there is anything that I can do to help you, don't hesitate to ask me, Tom Davis. Dial (302)398-3757 Just give me a call and I'll be glad to help in any way I can.

Also if your in the market for a new Delaware home just visit: I would love to show you what homes meet your current criteria.  The service is absolutely FREE to all my home buyers here in Delaware.


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Tom Davis

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