Protecting your home: two essential policy options every homeowner should consider

As a homeowner, it’s essential to ensure that your home is adequately protected with the right insurance coverage. While you may have a homeowners policy, it’s crucial to understand that it may not cover all the costs of rebuilding your home in case of damage or destruction by a covered hazard. In this article, we will discuss two policy options that you should consider to ensure that you have enough coverage and can rebuild your home without any financial strain.

Extended dwelling coverage:

The cost of rebuilding your home may differ from its market value, and your current homeowners policy may not accurately reflect the true costs of rebuilding your home. Extended dwelling coverage is an affordable option that can help you rebuild your home if construction costs change and add up to more than your current policy limits.

Let’s consider a real-life scenario to illustrate this concept better. Suppose your home is currently insured for 100% of its replacement cost, with the cost based on the value of your house when the policy was originally written. However, a wildfire sweeps through your area, destroying your home along with hundreds of others nearby. Due to the high demand caused by the natural disaster, construction materials and labor costs increase by 20% in your area. So, your $200,000 home will now cost $240,000 to rebuild. If you had 20% extended dwelling coverage, you’d get the $240,000. Without it, you get $200,000 and will have to make up the difference out of pocket or settle for less house than you originally had.

Extended dwelling coverage is an essential policy option that can provide you with the additional coverage you need to rebuild your home in case construction costs increase. It’s an affordable option that can give you peace of mind knowing that you have enough coverage to rebuild your home in case of a disaster.

Building ordinance or law coverage:

If your home is damaged by a covered loss and needs to be rebuilt or repaired, you are required to build according to current building codes. And since codes have grown more rigorous over the past 20 years, this could mean much higher costs to rebuild than you anticipate. That’s where a building ordinance policy, or law coverage, comes into effect — and it could save you thousands of dollars.

Again, let’s take the example from above and assume you have a $200,000 homeowners policy. With a 10% building ordinance policy, you would get an extra $20,000 to apply to the new building code requirements you must meet. Without this policy option, you’ll have to pay the difference to bring your house up to code.

Building ordinance or law coverage is an essential policy option that can help you cover the additional costs of bringing your home up to code in case of damage or destruction. It’s an affordable option that can provide you with the coverage you need to ensure that your home is rebuilt to the current building codes.

Why you need these policy options:

While your homeowners policy may provide you with coverage for damage or destruction caused by a covered hazard, it may not cover all the costs of rebuilding your home. Construction costs can change due to various factors, such as natural disasters, inflation, and changes in building codes. These policy options can provide you with the additional coverage you need to rebuild your home without any financial strain.

Extended dwelling coverage and building ordinance or law coverage are affordable options that can give you peace of mind knowing that you have enough coverage to rebuild your home in case of a disaster. These policy options can help you avoid out-of-pocket expenses and ensure that your home is rebuilt to the current building codes.

How to get these policy options:

To get these policy options, you can contact your insurance provider and ask them to add extended dwelling coverage and building ordinance or law coverage to your homeowners policy. These policy options are usually affordable and can provide you with the additional coverage you need to rebuild your home in case of a disaster.

It’s essential to review your homeowners policy regularly and ensure that you have enough coverage to rebuild your home in case of a disaster. These policy options can provide you with the additional coverage you need to avoid out-of-pocket expenses and ensure that your home is rebuilt to the current building codes.

As a homeowner, it’s essential to ensure that your home is adequately protected with the right insurance coverage

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