Homeowner's Coverage Basics

Services for Real Estate Pros with Obrien Russo Quint

Whether you are purchasing your first home or finally getting around to checking your coverage on your day off, determining if your home has enough coverage can be a confusing/impossible task for most.  At first glance you may feel your home is underinsured.  I have had many people call me frantically saying "I can sell my home for $350,000 and it is only insured for $275,000, I don't have enough insurance!".  I have to remind them that property values and re-building costs are quite different.  Remember, re-building your home does not take into account the neighborhood you live in, or how many acres your home sits on.  Rarely if ever will the property value not exceed the re-building costs (even in this trying real estate market). 

Once the person has calmed down we then have to set about the task of calculating how much it would cost to re-build the home.  For this, insurance agents use what is called a "Costimator" or "Cost Estimator".  The industry standard is the Marshall & Swift/Boeckh Cost Calculator.  In this calculator we input the square footage of the home, how many bathrooms (are they custom or builder's grade), any attached structures and many many more items.  It is quite detailed even asking us to determine what percentage of the home is paint vs wall paper.  The biggest determining factor of the re-building cost of home is the square footage.  The calculator uses a dollar amount per square foot to attain a starting point.  Then it adds in for Hardwood floors or Ceramic tile etc.  This is why it is extremely important not to guess at the square footage, this could drastically skew the coverage amount.

Finally, as a safeguard most polices add as an endorsement either 25% or 50% (some even more) above the coverage amount stated on the policy.  In the event of a total loss if the calcualtion was not accurate there is still enough coverage to re-bulid the home back to the way it was before the loss. Protecting your biggest asset, your home, is important!  Call your agent to make sure you have enough coverage! 

Comments (6)

Sergio Rebollo Jr.
Real Estate TeamMates - Miami, FL

Jim....Welcome to ActiveRain.  This is a great community to network with others as well a great place to learn from other's experiences and knowledge.  I've enjoyed it; I hope you enjoy it as well.

Sergio Rebollo Jr.
Exit Prime Realty
Coral Gables, FL  33134

Miami Short Sale Specialist - Profile

Dec 29, 2008 07:54 AM
Vicente A. Martinez
Prudential Douglas Elliman Licensed Real Estate Salesperson - Woodhaven, NY
Realtor, Brooklyn - Long Island - Queens Homes

Hi Jim and welcome to active|rain.

Coverage is something that is commonly overlooked by buyers and homewoners alike. Great information you've written about here. 

There are thousands of tips, tools, and tricks of the trade here. Be sure to check them out. Best of luck and see you around.

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Dec 29, 2008 11:20 PM
Dan Magstadt
Paramount Residential Mortgage Group, Inc - Lake City, FL

Congrats on your first post - Welcome to ActiveRain!!


Dec 30, 2008 08:07 AM
Kevin Sandridge
Signature Home Funding - Winter Haven, FL
Winter Haven Mortgage Broker



New Years - Twitter - Florida Home Loans

Hi Jim,

Happy New Year and Welcome to the Rain!

Kevin Sandridge, here. I joined the Active Rain community not too long ago myself and wanted to drop a line to share some of the good vibes and welcome wishes I have received already.

A Bit About Active Rain

I'm very excited about this community - basically because folks seem so willing to help out, provide industry insight, and share their good news and experiences!

When I started out on Active Rain, I felt a little overwhelmed.  I hope the following points and suggested sites will help bring you into the mix!  Just my way of saying that I'm glad you're here.


One:  Be sure to include a good amount of information on your profile page.  Check out the profiles on other Realtor's sites here on Active Rain who are listed as "Featured" or "Tops" in their area (look for high point totals).  You'll find that this will seriously boost your presence on ActiveRain - via the added points. 

Two: I urge you to keep blogging on this site!  You will be AMAZED at the awesome feedback you receive very soon after they hit the network!  I use Google Reader to subscribe to blogs that provide me with ideas about what I'd like to comment on - both industry wise and just for fun!  Check it out I am more than willing to step you through the site and to help you get a few more blog posts generated if you wish - as a way of adding some value and paying forward some good networking vibes!  :)

Three: Be sure to add in a good number of posts about what you think and consider pertinent regarding your area of expertise!  You'll notice that many if not all of the Featured posting bloggers here on AR do this.

Lastly, I do quite a lot of work via social networks, email campaigns, and relationship building.  If I can ever be of any assistance, don't hesitate to ask.

Here are a few great sites to visit (some of my favorites).  If you like the information they provide, be sure to let them know I sent you!

Looking forward to what you'll share with us here on Active Rain!  :)


Kevin Sandridge
Winter Haven, FL

Dec 30, 2008 08:57 AM
Sasha Miletic - Windsor Real Estate
RE/MAX Preferred Realty Ltd. - Windsor, ON

Hi Jim, Welcome to AR, Be a Blogholic and start writing your own blog soon on AR. All the best for your RE business. This is the right place for customers, friends, realtionships etc.

Best - Sash

Dec 31, 2008 11:30 PM
Dave Jones
Dave Jones Realty, llc. - Prospect, CT
Broker/Owner - e-PRO Dave Jones Realty llc Prospec


Welcome!  Also, a quick thank you for saving me so much on my policy!  I guess I am your first "satisfied customer" to post feedback for you.  I will be sure to have my clients call you for a quote too.


Jan 08, 2009 04:21 AM