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Home Construction

Home insurance provides financial protection to property owners. In some cases, this coverage can become essential.

Fires can threaten to burn your home down. A storm can cause roof damage, leading to mold growth, and necessitating total restoration. A tree can fall onto a home, damaging it so badly that contractors cannot repair it. In these cases, the insurer may total the home. This means it will pay to have the home rebuilt. But, there are limitations.

All home insurance policies have a maximum value. This is the highest value the policy will pay out in the event of a total loss. How much is your policy's limit? If you do not know, now may be the time to find out.

As construction costs rise, it is becoming more expensive to rebuild a home. If your home insurance coverage does not match these costs, you may find it impossible to rebuild in such situations.

Why Are Rates Rising?

Residential construction costs are on the way up. The cost of materials is higher than it was before. The cost of labor is rising. The overall cost of homes is significantly higher than before as well. Considering this, it simply costs more to build a home. Some home insurance policies will include an inflation clause, allowing the value of a payout to increase based on inflation. But this not always the case.

What Should You Do?

There are several things you should do now:

  • Contact your Affordable Insurance Group agent. Find out what your claim limit is in regard to reconstruction.
  • Determine if your home has enough value to cover the re-construction of the property. Think about this as constructing the home in a way similar to how it was before the destructive interest. This is different than the current market value.
  • Speak to area builders or do some research. Find out how much it costs to rebuild a home like your own.
  • Adjust your policy as necessary. You may simply need to increase the value of it.
  • Come back to this point each year. Be sure to update your policy often to ensure it continues to reflect the current cost to rebuild.

Home construction costs are moving up, but this does not have to put you at risk. Instead, work with your Affordable Insurance Group agent to update your policy. It may not cost you much more to increase this coverage. And, you will appreciate it if you have to file a claim later.

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