If you are like most homeowners, you are under the assumption that your property insurance will cover all of the costs involved in rebuilding your home after a catastrophe. Some policies, however, will only pay the amount left on the mortgage. In addition, because the value of your home has likely increased over the years, this coverage may not take into consideration the current value of your home. It will also not be enough to pay for any necessary rebuilding and labor costs.
To make sure that you are adequately covered if your home needs to be rebuilt, you need to consider an insurance package with guaranteed replacement coverage. You may be asking yourself, “What is guaranteed replacement cost coverage?” With this policy, your insurance company will cover all of the costs involved in rebuilding or replacing your home. Everything from labor, supplies and materials will be covered, even if the costs have increased significantly since you purchased your policy. You will also have the peace of mind knowing that your home will be built to the current building codes.
Your home is perhaps the biggest investment you will ever make. It is critical to make sure it is protected in the event of a catastrophe.