What homeowner should know about rebuilding
For many people their home may be the biggest investment they will ever make. Determining your home's estimated replacement cost is important because in the event of a loss the replacement cost will ultimately determine how much coverage your policy will provide. Since it is impossible to predict today what the exact cost will be to replace your home in the future, it's important to have enoughcoverage to acount for unforseen circumstances.
The keys are:
1. Understanding the difference between market value and replacement cost
2. Making sure that your home is insured for at least 100% of its estimated replacement cost.
Market value is the amount a buyer would pay for a home, including the land, regardless of how much it would cost to rebuild the home. Replacement cost for insurance purposes is the rebuilding cost necessary to repair or replace the entire home.
To determine the proper amount of homeowners coverage:
1. Ask if a replacement cost estimate is available when you have your home appraised.
2 Consult with your local builder association or a reputable builder for an estimate.
Market conditions in your area may impact the amount it will cost to rebuild your home if you experience a loss. Replacement cost estimates are influenced by factors such as supply of labor, the cost of labor, and the cost of construction materials. If neither estimate is available, the following basic guidelines can be used for the San Francisco East & South Bay Areas:
Approximate Economy Home Rebuilding Cost: $200 / sq ft
Approximate Standard Home Rebuilding Cost: $250 / sq ft
Approximate Semi-Custom Home: $350 / sq ft
Approximate Custom / Luxury Home: $400 / sq ft and up
Should you experience a fire, water, or mold loss, you can count on SERVPRO to help. Our goal is to help you regain control and make your damage "Like it never even happened."