Extended Replacement Cost

The dwelling coverage on your homeowners policy is the amount your insurance company has determined it will cost to rebuild your home if it is destroyed by fire or storm under normal market conditions. But under abnormal market conditions, like when a fire or storm damages an entire neighborhood, the demand for contractors, sub-contractors, and materials will dramatically increase and so does their costs. The “Extended Replacement Cost” option on your homeowners policy can help to cover these additional costs. Generally, policies carry this kind of coverage in percentages such as 25%, 50%, 100%, 200% of the dwelling coverage all the way up to “Guaranteed Replacement Cost.” And, you guessed it, the more the coverage, the higher the premium.

Some people treat insurance like it is a commodity and the only thing that matters is a cheap premium. But a cheaper premium can sometimes exclude necessary coverages. With proper insurance protection, if a tornado should destroy your neighborhood and home, you would only have to pay the deductible on your homeowners policy.  Do you have that kind of protection?  Please call me, Jim McKee at 615-377-0017.