Home Replacement | Insurance Gaps | Farmers Insurance
Homeowners insurance is a powerful tool. It helps cover your personal property (anywhere in the world in most cases), your liability, and can even cover costs to rebuild your house in the unfortunate situation you suffer a natural disaster or other total loss. If you’ve made some renovations though, or haven’t checked your coverage in a while, your insurance might not be as powerful as you think.
Let’s say you first purchased your Homeowners insurance a few years ago. You did your research, calculated your coverage needs, and spoke to a Farmers agent before choosing the limits you wanted. Since then, your contractor renovated your bathroom, you bought new carpet, and even built a bar in the basement! The problem is, your Homeowners limits are still based on your pre-renovation calculations. If anything were to happen now, your limits might not be sufficient to cover the increased value of your home!
That’s a major gap!
Question: If you’ve renovated, how do you make sure your Homeowners insurance limits are enough to rebuild your home after a total loss?
Answer: Update your coverage
In general, it’s a good idea to review your Homeowners insurance coverage every few years, or after any major renovations or additions. Labor and the cost of materials can change over the years, and you don’t want to leave any gaps in your coverage…especially when it comes to your home.
To get a better sense of what coverage limits you’d want, think about:
- Upgrades. It may cost more to rebuild upgraded features and additions.
- Age of your home. It may cost more to rebuild an older home to modern building code standards.
- Local rebuilding costs – Labor and materials costs in your area may have changed over time. Talk to a trusted contractor or your Farmers agent about local building prices.
To make any changes to your coverage, talk to Angela Johnson. She can give you some great insight and even run a Replacement Cost Estimator. That’ll give you a better idea of what it might cost to rebuild your house in today’s market.