Although the market value of your home is usually based on tax assessment records, property assessments or recent sales prices of similar homes in your neighborhood, your home insurance limit is based on what it would cost to replace your home if it was completely destroyed. This is often a different figure of what your home could fetch on the open market.
Erie Insurance uses a Home estimator program costs called to determine how much it would cost to rebuild a house from the ground up. "The estimator uses information on the characteristics of a dwelling to determine the estimated replacement cost," said Terry McConnell, Vice President, Personal Lines Underwriting at Erie Insurance. "The information is derived from several sources to arrive a very close approximation of what it would cost to rebuild a home. "
Factors affecting the reconstruction value of a house
many factors affect how much it would cost to rebuild a home. Some of the major include:
- video of square of the house
- The materials used in the interior and exterior construction
- style of the house
- special features or custom as fireplaces or external fittings
- Any improvements or additions to the house
- local construction costs
It is common for a house to have a much higher homeowners insurance limit when it is an old house.
"original building materials common to old houses such as plaster, hardwood floors, wood trim and full size make the replacement cost of the old houses above a house modern of the same size and style, "said McConnell.
The best way to ensure your home
When insuring your home, the value must be equal to the amount it would cost to replace the House. You'll also need to make sure your home is covered on a replacement cost basis rather than a basis of the real value of money.
Actual coverage of the cash value made a net of settlement based on depreciation. Meanwhile, the coverage of the replacement cost pays the actual cost of replacing your home with materials of like kind and quality without deduction for depreciation.
To illustrate, imagine that you paid $ 10,000 for a new roof. It dampens $ 1,000 each year. If your roof was destroyed by fire in the fourth year, you will get $ 00 to replace under a settlement the real value of money. A Regulation of the replacement cost would replace the damaged part of the roof without a deduction for depreciation.
Many policy owners ERIE automatically ensure the houses on the basis of replacement cost. An Erie Insurance agent can tell you more about the cost of replacement and how your home insurance.
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