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Your
home can be insured in three different ways:
1.
Replacement Cost Coverage: the insurance company pays the cost of
replacing the damaged property to the policyholder without deduction for
depreciation, but it is limited to a maximum dollar amount.
2.
Guaranteed Replacement Cost: the policyholder is paid the full cost of
replacing damaged property without a deduction for depreciation and without a
dollar limit. You will not find this coverage available in every state. To
provide protection against immediate construction cost increases
because
of a building supplies shortage, some companies limit the coverage to 120
percent of the cost of rebuilding your home.
3.
Actual Cash Value policy: the insurance company pays the amount equal
to the replacement value of damaged property minus an allowance for
depreciation to the policyholder and minus your deductible. The coverage is
for actual cash value unless a homeowner’s policy specifies that property be
covered for its replacement value.
You are
able to calculate an estimate of the amount to rebuild your home by
multiplying the local building costs per square foot by the total square
footage of your house. Consult your local builders association or real estate
appraiser to find out the building rates in your area.
Certain
factors will determine the cost to rebuild your home. These include:
-
Local
construction costs
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The
square footage of the structure The type
of exterior wall construction -- frame, masonry (brick or stone) or veneer
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The
style of the house (ranch, colonial)
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The
number of bathrooms and other rooms
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The type
of roof
-
Attached
garages, fireplaces, exterior trim and other special features like arched
windows
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