California Homeowners Insurance-Replacement Cost

Is your home insured to Replacement Cost?  According to the Insurance Journal, the California Department of Insurance is proposing regulations to ensure that homeowners have more accurate replacement values for their homes as under-insured homes are becoming a problem.

With the recent down turn in the real estate market there is a common misconception that the insured value of a home should also be reduced.  It is important to remember that the replacement value of your home has nothing to do with your home’s market or resale value.  The Replacement Cost is based on what it would cost to completely rebuild your home if it were totally destroyed today.

Building costs have not gone down and it is safe to say that in many areas of California it would cost more to build a home today than to purchase an existing home.

At Van Beurden Insurance Services we complete a Replacement Cost Estimator for each property and insist on insuring homes to 100% of their Replacement Value.  Although I do not necessarily want to have more regulations set forth by the Department of Insurance, if it is necessary so that inexperienced agents or out of area insurers do not under-insure homes, so be it!

If you are concerned about the insured value of your home or if you would like a free review of your coverage please feel free to contact our office today!