Reconstruction Cost And Your Coverage A (Dwelling) Amount
Do you know how much your home insurance policy will pay in the event your home is totally destroyed by a covered cause of loss? Reconstruction cost is the amount it would cost to rebuild your home if it were destroyed. It includes costs like materials, labor and municipal fees. It does not include the cost or value of land. That amount is used to set your Coverage A (Dwelling) limit, which is most your policy will pay to rebuild your home if it were destroyed by a covered cause of loss.
It's important to understand that reconstruction cost is not related to market values of homes.
Market value is the price a a buyer would pay to purchase the home, including the land and property, in its current condition. It takes into account changes in the housing market and economy. It does not take into account the cost to rebuild the home.
Ultimately, it is the consumer's responsibility to make sure they have purchased the sufficient amount of insurance coverage to rebuild their home and replace their personal property. I am happy to assist in educating on the process of deciding how much coverage is right for you!
Please give my team a call to help you with your insurance needs today!
Stan Polk, CPCU
(972) 727-9111
www.farmersagent.com/spolk
