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Tag: replacement cost

Will Rising Lumber Costs affect my Insurance

Insurance is an old industry. Through the many ups and downs of the Economy Insurance has been a way to balance risk within the real world. Lumber costs have recently seen a large increase due to demand, supply and transportation issues. You may look at your home’s replacement cost (rebuilding cost) and wonder if you are adequately covered in the event of a total loss.

Many policies these days have Extended Replacement Cost. Under a modern home policy form you should be covered up to the amount shown on your policy dec page. If you have an extended replacement cost endorsement you may be covered for 10%, 25% or 50% higher than your total replacement value. This is an additional protection in case you had added on to your home or building costs skyrocket. Check your current policy or ask your agent what your total replacement cost is.

When we write home policies we do initially calculate your homes replacement value with a replacement cost estimator. These estimators are built by companies who are always updating costs and pricing using market trends and forecasts. This means that even when hurricanes strike and create mass catastrophic losses we are prepared to rebuild the home you lost even if prices increase dramatically.

All this being said it is still a good idea to let your agent know when you add on that sun-room or remodel your kitchen. That helps your agent keep your policy current.

By Aaron Wallrichinsurance 101, insurance coverages No comments yet

What is new with Renters Insurance

The answer is….not much. People still buy possessions and store them in their apartments and condos and we still insure them. A few things to be aware of when buying renters insurance is to always have “Replacement Cost” coverage on your contents. We have found some low quotes from online sites are leaving that off to be $20 lower. That means if you have a loss to your property they will be assessing your losses in one lump sum for what they determine the value to be. With replacement cost you go out and buy those items again, even if they cost has increased, and your insurance company reimburses you. Its a lot less stressful with Replacement Cost.

Another thing to look at when buying or revisiting your renters coverage is your liability limit. In Wisconsin the lowest limit is generally $100,000. Just ask us or your agent to quote $300,000 or even $500,000. You will be surprised at how little the rate goes up. Liability is really a very important coverage to protect you from lawsuits. Lets say you are responsible for a leak and it damages other tenants (and your landlords) property. Better to be safe with higher limits so you aren’t selling your assets to pay for other peoples stuff.

The last reason you might consider a renters policy is something you wont ever think of. If you purchase a home you will suddenly need a homeowners insurance policy. Some home insurance policies will give you a discount for having prior coverage. Your renters policy will qualify in most cases. Often times your renters will help you save on a package with your auto. I have seen cases where the savings pays for the entire renters policy.

Keep these items in mind and call us if you have any questions. Lets protect what we have with a renters policy.

By Aaron Wallrichinsurance 101 No comments yet

I have too much personal property coverage

Have you ever noticed that your insurance policy has an extremely high amount of “personal property coverage” listed on it?  Have you ever wondered where that amount even came from…it usually seems arbitraty and non even.  The answer to why it is not even is that it is often a percentage of your Home Coverage amount (sometimes listed as Coverage A).  The average unendorsed homeowners insurance policy will contain a personal property coverage that is 50% of your Home coverage amount….so if your home is insured for $300,000 your policy will include a personal property coverage of $150,000.  Most modern policies or endorsed policies will give you 75% or 80% personal property coverage.  Why so much? 

When we at the Wallrich Agency write a new homeowners insurance policy we do a replacement cost estimator to determine the “rebuilding” cost of your home. This allows us to give you accurate coverage in case your home has a large or total loss. Often times people never come up with an amount of coverage for their personal belongings. Have you ever tried to calculate how much stuff you own ? Its a lot of stuff… This is why we err on the side of caution and give you 50, 75 or 80% coverage. Will you receive a check for that entire amount? The answer is “no”.

When a home claim is initiated the building loss is calculated and then separately we begin the process of determining what belongings you lost as a result of the claim. Most insurance companies will issue you a payment and request your receipts to issue you more money…this process usually takes a long time as it also becomes hard to remember what you owned. For this reason we generally tell our clients to make a video of their home on their phone so they can look back later and remember items. The company will replace to the best of their ability what you lost but sometimes you may get different clothes or upgrade appliances and that is expected….you may have to pay the difference on those upgraded-items. Sometimes the insurance claim adjuster will simply give you the option to settle the total amount and you can do whatever you see fit. This is a conversation you may have after a loss.

I hope this cleared up some questions you may have on the topic of personal property coverage. Please call us with questions or concerns you may have on your own policy. there are some related issues you may want to explore further such as: How much personal property do I have away-from-my-residence? or, Do I have a large collection of something that i can itemize before a claim occurs? Lastly, items like firearms, collectibles, jewelry and cash or coins may be limited by your policy so you will want to ask your agent about that.

By Aaron Wallrichinsurance 101 No comments yet