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For many of our members, their home is everything. Experiencing a complete loss due to weather or fire can be overwhelming. Hope and recovery can be found in bringing your family's home back to its original splendor. The Harpers did this through meticulous planning, hard work, and our assistance. Watch their story:
"I have homeowners insurance," you might think. Indeed, your lender mandates that you maintain a standard homeowner's insurance policy that covers at least the balance of your mortgage loan. But have you considered the impact of a catastrophic event like a house fire or tornado? Picture being unable to fully rebuild because your insurance coverage was insufficient. You must plan for it. Here are two key insurance questions that can influence a complete home restoration.
What would it cost to rebuild your home?
Even though housing prices have increased, the value of your home on your insurance policy might still be less than the actual cost to completely rebuild it, due to local labor and material costs. For example, if your homeowner's policy Coverage A (the insured amount for the structure) is set at $200,000, this would be the maximum payout for your home's loss, regardless of the escalating costs of building materials and labor.
The pandemic put significant pressure on the usual production of building materials, greatly increasing building costs. In addition, reconstruction tends to be more costly than new construction because new builders often construct multiple homes simultaneously, allowing them to purchase materials in bulk and reduce costs per home.
Should you consider replacement cost coverage?
A more advantageous option is removing cost restrictions if you need to reconstruct your entire home with replacement cost coverage. This extra coverage can cover the amount of money needed to repair your home at today's prices of building supplies. It can also cover to replace your belongings at today's cost of the similar or like item. It is important to discuss replacement cost with your insurance agent when purchasing your policy.
We provide an Extended Replacement Cost endorsement for a modest annual fee, which boosts coverage to 125%. With the same $200,000 policy, your payout for a total loss and rebuilding would be $250,000. This offers a valuable layer of additional insurance for a minimal yearly cost, protecting against the current surge in building and labor expenses. This added security and the ability to rebuild according to today's market standards could be your optimal choice.
We're here to help
Here at Northern Neck Insurance, we provide a boost to standard home insurance with an "inflation guard" that automatically bumps the amount of coverage up a small amount upon annual policy renewal to help protect against under-insuring. But it's incredibly important for you to proactively be sure your home has adequate coverage by discussing it with an insurance professional.
Talk to a local expert
Our independent agents are skilled at uncovering significant savings on your homeowner's policy and determining the optimal replacement cost value for your Virginia home. When quoting for NNINS, they utilize our user-friendly "e 2 Value" tool, which allows them to consider your location, square footage, and even the quality and craftsmanship of your building.
If you haven't reviewed your coverage level in a while, it might be wise to meet or have a phone conversation with your local independent agent to ensure you're adequately insured. It's also beneficial to assess whether you need protection against risks specific to your Virginia community. Let's ensure your home is safeguarded in today's housing market so our priority during your loss can be to get your family back home as quickly as possible.
THE NORTHERN NECK INSURANCE INTEGRITY PROMISE — We pledge to provide straight talk and good counsel from our NNINS Virginia insurance experts through our blog. While we hope you find this to be a helpful source of information, it does not replace the guidance of a licensed insurance professional, nor does it modify the terms of your Northern Neck Insurance policy in any way. All insurance products are governed by the terms in the applicable insurance policy.
