Home Inventory

7 Along with documenting the personal property within your home, the accurate coverage of your residence itself is a very important aspect of homeowner’s insurance. The replacement cost of your home is based upon its square footage multiplied by the cost per square foot to rebuild your structure. The quality of construction and your home’s refinements should also be considered. Unless you are willing to take a loss, the dwelling or structure limit should be the amount it would cost to replace the house. Most insurers have in-house formulas which they use to evaluate the replacement cost of your home. However, you may find these formulas are not necessarily consistent. READ YOUR POLICY CAREFULLY If you do not understand any part of your policy or have questions about what it covers, contact your insurance agent or company. The cost to rebuild your home may be very different from the market value of your home since reconstruction is based primarily on the cost of labor and materials. Many factors can affect the cost to rebuild your home, including the size of your home, the type of construction, and any unique features. Because of the variability, your independent agent should be able to assist you in establishing an appropriate limit to rebuild your home. You may also wish to contact a local building contractor in order to determine the current cost to rebuild your home per square foot. If this information greatly differs from your insurer’s determination, be sure to have the contractor reflect his computations in writing, preferably under his business letterhead. Lastly, it is important for you to periodically assess and, if necessary, update your insurance limits in order to maintain an appropriate limit that reflects current construction costs. Find out from your agent or insurer if your homeowner’s insurance coverage limits are automatically reviewed or increased each year. Remember, ultimately it is your responsibility to make sure you are adequately insured. Structure Or Dwelling Coverage