Does New York Homeowners Insurance Cover the Full Replacement Value of Your Home?
The replacement value of a home for the purposes of a New York homeowners insurance policy is the amount it would cost to rebuild the house to its current specifications after a fire or other disaster. The cost of homeowners insurance premiums is heavily influenced by your home’s replacement value, so when you review homeowners insurance coverage it’s important to make an accurate estimate.
Don’t confuse the insurance replacement value of your home with its market value. Your home’s market value includes the plot of land where home is built, but if the home has to be rebuilt it’s only the structure that is replaced.
The cost of building a house includes building materials and other cost factors such as labor. These prices tend to rise steadily over time, so to ensure that you are fully covered for the cost of reconstruction you should take some time each year to recalculate the building replacement of your home and adjust the building replacement coverage of your homeowners’ insurance policy accordingly.
Being forced to evacuate your home while it is being rebuilt after a disaster may involve heavy additional living expenses for you and your family, such as the cost of temporary rental accommodation. As part of your review of coverage, consider the extra living expenses you might face during rebuilding of your home after a disaster. Talk to your agent or insurer if you are unsure whether your New York homeowners insurance coverage for building replacement and additional living expenses is adequate for your needs.
*
