If you're like most of our members, your home is your world. Suffering a total weather or fire-related loss would be devastating. But hope and healing would come from restoring your family's home back to its full glory like the Harper family was able to.
"I have homeowners insurance," you say.
Yes, your lender requires that you have a homeowner's insurance policy that at least equals the balance of your outstanding mortgage loan. But what about a catastrophic loss from something such as a house fire or tornado? Imagine not being able to rebuild it completely because you didn't have the right amount of insurance.
You must plan for it. Here are two key insurance questions that can influence a complete home restoration.
Even though housing values have increased, your home's value may still be less than the cost to completely rebuild it, depending on the labor and material costs in your area. For example, suppose your homeowner's policy Coverage A value (the amount you insure the structure) covers your home for $200,000. In that case, that may be the maximum payout towards the loss to your home, regardless of the increase in building materials and labor.
The pandemic has also created intense stress on normal production of building materials, thus significantly driving up building costs. But reconstruction is always more expensive than new construction because new builders usually build many homes at the same time and are able to bid on materials on a larger scale, lowering the price for each home.
A much better scenario is eliminating cost limitations if you need to rebuild your entire home. We offer an Extended Replacement Cost endorsement for a small annual premium, increasing coverage to 125%. For the same $200,000 policy, your payout on a total loss and coverage to rebuild would be $250,000. That's a nice bit of extra insurance for a nominal annual fee against today's rising building and labor costs. Extra peace of mind and the flexibility to rebuild to today's market standards might make this your best choice.
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.
Our independent find an agent are experts at finding valuable savings on your homeowner's policy as well as the best cost replacement value for your Virginia home. When they are quoting for NNINS, they use our easy "e 2 Value" tool that enables them to factor in your location, square footage, and even building quality and craftsmanship.
If you haven't looked over your coverage level in a few years, it might be time to sit down or have a phone call with your local independent agent to be sure you're not underinsured. And it's also a good idea to check and see if you need protection against hazards unique to your Virginia community.
Our underwriting team is also available to answer your questions anytime. Our focus during your loss is getting your family back home as soon as possible. Let's make sure your home is protected in today's housing market.