We all saw the devastation in Florida from Hurricane Ian. Its estimated losses will total $50 billion. Sadly, due to inadequate insurance coverage, many will not fully recover their losses. Closer to home, we can still see some of the damage caused by the tornado outbreak in March of 2021. 

Do you know what happens if your home (or second home) is damaged or destroyed? The answer depends on the type of coverage you have: 

• Replacement cost – Replacement coverage is subject to a maximum amount. If the estimated replacement cost is $400,000 and your home is completely destroyed, the insurance will only pay $400,000 and no more. Very important to have an accurate replacement cost estimate on your home
• Guaranteed replacement cost – your home will be replaced no matter the cost. So, your $400,000 home (estimated value) is completely destroyed, and it costs $450,000 to rebuild. The total cost of the rebuild is covered. Try and find insurance companies that offer guaranteed replacement, not just an increased percentage.

Which type of coverage is better? If you are comfortable with the accuracy of the replacement cost estimate, replacement cost coverage may be fine. Over the last couple of years, building costs have soared. Material costs may increase again as homes are rebuilt in Florida. Some may want more comprehensive coverage and know the damage will be repaired no matter the cost.  

Review coverage with your agent or have another agent review. Most people get coverage and put it on autopilot. Review all coverage, not just for your home. It’s too important to handle through an exchange of emails – meet in person or at least by phone. 

As always, we are here to help and can provide referrals if you need assistance.