The Importance of Having Enough Home
While finding home insurance can be a daunting process, it's important to have enough home insurance to cover your belongings, and the house you love, in case of an
Experts are warning that it's important for homeowners to ensure that they have insurance to rebuild their home entirely in the same location. Having the right home insurance will make sure your livelihood is covered in case of accidents that can ultimately destroy your
The warning that stresses people to be fully covered follows a recent report released which found that five million Brits are considering cutting back on their costs, including home and car insurance, during the current economic
A large proportion of those surveyed said that insurance cover was one area they were prepared to cut back on because they cannot afford it, leaving many experts warning that the decision could cause more harm than savings. It was also found that flood risk insurance in particular was one aspect that many people were considering cutting from their house insurance. Experts have warned that cutting flood damage or home contents insurance could lead to devastating and expensive consequences in case of an accident. It was noted that while insurance payments may seem unnecessary at the moment, it could lead to greater repair costs in case a natural disaster or accident does damage to your
Consumers are being urged to seek the right insurance that fits their personal home and budget. Evaluating your coverage can help ensure that no money is wasted and that your home is continually insured against
Added to that, consumers are being reminded to ensure that their home insurance is up-to-date, and that you understand your current policy. It can be easy to forget to renew or increase your home insurance, but it's an important step in ensuring that homes are fully insured against anything that could
In addition to home insurance, it can also be useful to have personal belongings insured in case of damage that can ruin expensive and sentimental items. There are also plenty of ways to save money while still keeping your home insured, including shopping around for the best agency and rates and requesting an inspection to prove the state of your
Seeking appropriate home insurance doesn't have to be expensive. Consumers can rest assured that they're covered no matter what happens when they find the home insurance that's right for their home and budget.
This era of the “Great Recession” has been a challenging one. Dramatic economic conditions have affected both the U.S. real estate market and the residential construction industry. National data collected over the past year indicates extreme financial decline, with property market values plunging up to 40% in some areas, permits for new construction down by 36.9%, and foreclosure rates spiking across the country. Ironically, the costs to rebuild and repair a home are not declining at this same rate.
Overall construction costs actually increased approximately 1.3% nationwide from January 2009 to January 2010.* As a homeowner, you may be perplexed by the gap between the current market value for your home and the replacement cost listed on your homeowner’s insurance
Market value vs. replacement
Market value (the price at which your home may sell today) is not the same as replacement cost (the price to repair or rebuild your home if it is severely damaged). When rebuilding a home, contractors must work with and match existing materials, which requires skilled labor that costs more. Plus, when a contractor rebuilds a single home, there are no economies of scale. The cost to rebuild is always higher than the initial cost to build.
Market value includes factors such as the quality of the local school system and popularity of the neighborhood and, therefore, is not a good indicator of the proper amount of insurance coverage for your home. The estimated replacement cost for your home, however, is a significantly more reliable indicator of the appropriate coverage limit needed in the event of a major
Key factors that contribute to rising construction costs• Varied spikes in building material costs throughout 2009 and expected for 2010-2011.• Fluctuating energy costs.• A 3% increase in the cost of skilled labor from 2009-2010.• Increased demand for imported raw materials and building products.• Anticipated rise in inflation for
Factors that can affect home replacement cost·
Contractor Fees. The typical contractor fee is 15-20% of the overall building cost or even more for larger, more ornate homes.·
Architectural and Related Fees.
Fees for architecture, interior design, engineering, and other related services should be included in the home replacement cost. These fees can add another 10-15% to the overall building cost.· U.S.
Natural disasters such as hurricanes in coastal regions, floods in the Midwest, and wildfires in the West have contributed to shortages of building materials and overall cost increases. Building codes are continually enhanced following these natural disasters, which can increase the replacement cost of a structure.·
The trend to build “green” is gaining momentum and popularity with consumers. Building with ultra efficient technology has contributed to rising construction costs that are 15-20% more than traditional construction.·
Rebuilding Custom and Historic Homes.
The materials used to reconstruct custom homes or restore historic homes are more expensive than those used to build average homes, due to finer quality and the fact that specialized homebuilders buy these materials in relatively small quantities. Also, fewer craftsmen specialize in custom construction and historic renovation, and greater demand for these specialists has led to increased skilled labor costs