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Homeowners in Florida and South Carolina face significant weather challenges. Determining the correct amount of homeowners insurance to carry on your home can be a challenge. A recent report from the United Nations’ Intergovernmental Panel on Climate Change warned that extreme weather would increase in the years ahead. Of the ten most expensive hurricanes in US history, eight hit either Florida or South Carolina, or both states and eight of those ten storms occurred since 2003. Determining the right amount of homeowners insurance replacement cost coverage for your home before a loss occurs is critical.
To determine the amount of homeowners insurance coverage you need for your Florida or South Carolina home, you must determine your homeowners insurance replacement cost value. Homeowners sometimes confuse their home’s replacement cost value with its market value. There is a very distinct difference between the two amounts and failure to understand the difference can be a very costly mistake.
Market value is the amount you could sell your home for in today’s marketplace. Replacement cost value is the cost to repair or rebuild your home after a loss.
Part of the difficulty in determining replacement cost is that after a catastrophe, building costs like materials and labor increase sharply due to an increase in demand. Therefore, it is essential that you accurately determine the cost to rebuild your structure in a worst-case scenario of widespread damage, not just a loss like a localized fire or other residential damage that might occur.
An insurance agent experienced in determining South Carolina or Florida homeowners’ values can help. Using a national replacement cost-estimating program, your agent evaluates the replacement cost of your home. They enter straightforward variables like your home’s square feet and its construction, both interior and exterior. The estimating program also factors in the location of the house and the cost of construction in your specific area.
The estimating program also considers increased construction costs due to building code changes and the cost to remove debris, a vital step before rebuilding. Program updates occur regularly, so you can be confident that your values are accurate given current market conditions.
Once the program provides a value, you can review the accuracy of the information contained in the cost estimator to ensure your coverage is sufficient. Relying on this cost estimator provides you with greater confidence that you insured your home to its proper replacement cost value.
Building codes vary by region between Florida and South Carolina. Florida adheres to the 2006 International Residential Code. South Carolina adheres to the same 2006 International Residential Code, but with less restrictive wind resistance requirements. Adhering to the differing codes and local regulations influences construction costs, and the estimating program builds these varying costs into its calculations.
We recommend that you review your coverage each time your policy renews or if you make any major renovations to your home. For example, a kitchen makeover may add many thousands of dollars to your home value. You must consider the costs to rebuild and replace more expensive equipment and kitchen upgrades like cabinets if a loss occurs.
One way to provide peace of mind in evaluating your home value is to purchase an Inflation Guard endorsement. This coverage automatically adjusts the replacement cost coverage limits of your home throughout the policy period to help ensure that your coverage remains adequate. Inflation Guard provides greater peace of mind and can help prevent a co-insurance penalty, which can hit you at the worst time—after a loss, when unanticipated costs soar.
We insure thousands of homes in Florida and South Carolina and have helped many homeowners like you protect their assets against life’s uncertainties. We partner to protect your home and family. Contact a member of our agency team today or visit our website for a free quote.