It is estimated that around 60% of American homes are underinsured by an average of 22%. Your home is most likely your single largest investment, so insuring it is sufficiently a vital piece of maintaining your financial independence.
You should have an amount of insurance that is adequate enough to cover the cost of rebuilding your home in the event it is completely ruined by a fire, tornado, hurricane, or other insured disaster. If you’re unsure how much insurance you need, that depends upon what it would take to restore your home based on current construction costs. Please refrain, though, from including the land value and considering the price you paid for your home or its appraised value; they do not affect anything.
There are other considerations to take into account when determining the amount to insure your home for, such as:
- Fees for an architect or other design expert to approximate costs and create plans to be followed by the contractor
- Rapid inflation in the cost of building materials and labor following a major catastrophe that affects a number of homes in the same region
- Local building codes that require replacement with additional features or more expensive materials
- If you are given an amount of what it would take to restore your home, in the end it could end up higher than originally predicted. If possible, it might help to take that into consideration.
There are a number of methods used to estimate the replacement cost of a home. Some of the factors insurance companies use are:
- Construction materials
- Type of foundation
- Attached or detached garages
- Square footage
- Location of the home
- Fireplace
- Upgrades
- Number of rooms and baths
In the end it is your responsibility to establish the value of your property and choose the amount of insurance for your policy. We can assist with that decision and make it clear what you can do to avoid an unpleasant shock after a loss. Call us today at 305-270-2100 to see if your Miami home insurance policy is up to par.
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At Filer Insurance, Inc., we have been serving Miami and South Florida since 1919. We specialize in miami car insurance as well as miami home insurance, miami life insurance and miami business insurance. Please give us a call, visit our website or come by our office for a free Miami home insurance quote.
