home replacement | bolder insurance

Is your home insured for its correct value?
Is your home protected? Since your home may be the largest investment you will ever make, it is important that you understand your home insurance coverage options.

Here are some factors to consider when choosing a policy:

Market value It is the amount you pay to buy a home, including land, regardless of the cost of rebuilding the home. The selling price or market value is determined by factors such as age, size, physical condition and location of the home.

replacement cost The cost required to replace or restore the entire home to its pre-loss condition. Replacement cost does not refer to the market value of the home, the purchase price of the home, the cost of the land, the appraised value, or the amount owed for any mortgage loan.

What factors help determine the cost of replacing your home?

Extended replacement cost It generally pays to repair or rebuild your home as before the loss, even if the cost exceeds the policy limit. The specified amount is an additional percentage, such as 25%, 50%, or 100%, over the amount the home is insured for.

Guaranteed replacement cost You will pay to repair or rebuild your home to its original specifications no matter the cost. There is no maximum amount that the insurance company will pay.

How could you be in danger

Choosing the right homeowner’s insurance policy can be just as important as choosing a home. When comparing policies, it is important to distinguish between levels of replacement cost.

You bought your dream home for $2.5 million. The replacement cost is estimated at $2 million. Six months later, a massive fire destroyed your home. Entire neighborhoods destroyed. The demand, the price of labor and the costs of building materials rise, resulting in a rise in the cost of rebuilding. The actual cost of rebuilding your home is $4 million. Depending on your chosen insurance and available coverage options, you may receive the following for your claim minus your deductible.

  • local construction costs
  • square footage
  • year built
  • Exterior walls / ceiling / trim
  • home style
  • Number of bedrooms/bathrooms
  • garage
  • Finishes
  • Personalization
  • Improvements / Renovations • Other Unique Features
  • Building code upgrades required
    Home Coverage Comparisons

    The market value of your home

    100% base replacement cost (Amount insured on homeowners policy)

    Extended replacement cost of 125%

    150% extended replacement cost

    Guaranteed replacement cost (amount required for rebuilding)

Homes are often not adequately secured, leaving insufficient funds to rebuild to the same specifications. The major loss of your home is painful enough, but not being able to make up for the rebuilding costs can be devastating.

talk to me A bolder insurance advisor About the cost of your replacement, and make sure he or she is aware of any significant changes in your home. Home renovations can have a significant impact on the replacement cost assessment. Upgrading wiring or plumbing may qualify you for additional credit. While we rely on experience and data to determine the appropriate amount, circumstances can drive the actual cost of rebuilding higher than anticipated. This is another reason to choose the guaranteed replacement cost.

Each claim is treated on its own individual facts and circumstances and in accordance with the language of the policy, including applicable exclusions, conditions, and limitations. The Insurance Overview is for informational purposes only and does not replace or modify the definitions and information contained in individual insurance policies or advertisement pages, which are dominant. Terms and availability vary by state and exceptions apply.

The content of this article is from Nationwide Private Client, a bolder insurance partner.

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