Calamities and unforeseen incidents can befall anyone. Sometimes, the incident may result in either complete or intensive destruction of your home. Therefore, it helps to know the rebuild cost of your house. Thinking about the day when you may have to make use of this information is an unsettling thought. Nonetheless, putting off this discussion is unfair as it refrains you from preparing for the uncertainties of the future.
Why Is It Essential To Know The Rebuild Cost Of Your Home?
Many people live in areas that are prone to natural disasters like floods, earthquakes, hurricanes & typhoons, etc. Often the damage is so severe that repairs are highly unlikely. At times like this, it is your insurance that will come to the rescue. But for that to happen, it is imperative that you know the rebuild cost of your home. Your property’s insurance value or coverage will depend on its rebuild value.
How Does The Rebuild Cost Help?
God forbid, but if an unfortunate event occurs that damages your house so severely that the only option left is to rebuild it. You will not be left with a hefty bill if your home insurance is based on its actual rebuild value. All you will have to foot is the difference amount. In short, the financial burden which would otherwise have been back-breaking becomes reasonable and bearable. Hence, it helps to know the rebuild cost of your house and buy coverage accordingly.
Rebuild Cost Of Your Home
We’ve been going on and on about the rebuild cost of your home, but do you know what it is? Well, if not, or if you’ve been hearing it for the first time, fret not.
So as you can infer from the name itself, rebuild cost is the money you will have to spend to build your house ground up once again post its destruction. There are several factors that are taken into account. Some of them are:
1. The cost of raw materials.
2. The cost of labor.
3. Survey costs, demolition costs, debris removal, and service installations (plumbing, electricals, etc.).
Rebuild Cost Is Different From Market Value
It might come as a surprise, but the rebuild cost of your home and its market value are two different things. When you apply for home insurance, it considers the rebuild cost and not its market value.
The fact of the matter is if you were to sell your house, you would get a higher value. Sad but true. The reality is rebuilding cost is usually lower than its market value. Factors like the cost of land, the property location, the type of house, its age, its school area, the demand of property in that area, etc., all play a discerning role in determining its market value.
How Much Will It Cost To Rebuild Your Home?
As a homeowner, you may not know the exact rebuild cost of your home. Still, you can figure it out from the following:
1. The last mortgage valuation report that you have or your bank has. You can request to see the bank’s copy.
2. The deed to your house will also have the information. If your house is old, you may have to make allowances for inflation and changes in the prices of the raw materials.
3. Your last insurance policy or the current one will also have this critical bit of information.
4. The report from the surveyor when you purchased the property will also have this bit of data.
The only drawback of using these documents as a reference point is that they are most likely outdated. Being out of date, they will not help you assess its true cost, and being way off the mark will fetch you a very low settlement if your property were to get destroyed.
What’s The Best Way To Determine The Rebuild Cost Of Your Home
There are two ways in which you can correctly calculate the rebuild cost of your house. These are:
1. Using An Online Rebuild Cost Calculator – These are pretty standard, and you can Google one up by simply searching for “Rebuild house calculator.” You will have to fill in some basic information like the square feet area of the house, region, the type of house, whether it includes a garage or other outbuildings, etc. Once you fill in these details, the calculator will give you a rough estimate of the final rebuild figure.
2. Hiring A Surveyor – You may not always have all the information handy. In that scenario, using an online calculator is of no use. So the next best option is to hire or engage the services of a surveyor. The person you need is a chartered surveyor whose specialization is rebuilding cost. Although their services don’t come cheap, yet they are the most preferred choice as they give you the most accurate estimate at any given time.
The Crux Of The Matter
It is essential for every homeowner to know the rebuild cost of their house. This will help them buy appropriate insurance coverage. Do keep in mind, your home’s insurance cover depends on its rebuild cost and not its market value. Hence, don’t mix the two. Any renovations to the house are going to change its rebuild cost. Consequently, whenever you do any upgrades to the house in the form of new additions or merging rooms, it is best to hire a surveyor to become aware of its current rebuild value. This way, when you renew your insurance plan, you can work with the most current and up-to-date figure.
In the event of any unfortunate event that causes immense destruction of your asset, rendering it uninhabitable and beyond repair, contact the professional team of Continental Public Adjusters. We can help smoothen the entire claim filing process and also guarantee that you get the maximum possible settlement. In your time of need, we are here to expedite matters and make things easier by sharing your burden. To book an appointment or just talk to us, call (800)989-4769.