Home Insurance   |   03/01/2023

Size is not the Only Consideration: Selecting the Best Insurance Coverage

For most of us, our property is our biggest investment. More than merely a functional structure, it holds great personal and monetary significance. The key to preserving this significance is having the right level of insurance coverage, reflecting the actual cost to rebuild your property at its original quality in the event of a total loss, including labor and material costs for the site work, foundation, and structure itself.

So, how can you be sure that you have the proper coverage limit for your property?

That’s where the Benson, Young & Downs team can help. The right level of coverage to protect your investment depends on a number of factors including location, size, living space, build quality, and fit and finish. We can explain these circumstances and offer our best guidance. Our team can also direct you to local builders who can estimate rebuilding costs, and we may be able to arrange for interior inspections to help assess values. That way, you’ll have the information needed to select the coverage that’s right for you.

Inflation is one issue to take into account. In the aftermath of the pandemic, inflation has been particularly acute in the construction industry, with rapid and severe increases in the costs of materials and labor. And this phenomenon is in addition to normal year-to-year inflation increases. Rebuilding today would therefore be significantly more expensive than the original cost to build.

Even if your policy includes an annual inflation increase feature, it probably hasn’t kept pace with these rising expenses. And if your policy lacks this feature, there’s a good chance that your property is under insured, perhaps substantially.

Changes in building codes represent another important factor to consider. Updates in building codes are enacted over time to make properties stronger, safer, and more energy efficient. That’s a good thing. Requiring 2”X6” framing rather than 2”X4” construction results in a structure that can far better withstand extreme weather.

But if you experience a property loss, repairs may have to be made in compliance with those newer codes, which can be addressed with appropriate Ordinance or Law coverage. Unless you’ve made substantial upgrades and improvements, the older your property is, the more likely you will need increased Ordinance or Law coverage to handle the extra costs of compliance.

We encourage you to contact us for a consultation to evaluate and, if you wish, adjust your coverage limits. The Benson, Young & Downs team is standing by, ready to help. We look forward to hearing from you.