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It’s no secret that the demand for North Carolina homes is extremely high.  This high demand and exceedingly decreasing supply is one of the many factors leading to increases in home prices across the state.  Most residents of North Carolina are aware that the Market Value of their home has increased dramatically.  What North Carolina homeowners may not be aware of, however, is how the replacement cost value of their home has also increased. 
When your homeowner’s insurance policy was first written, an estimation was made as to how much it would cost to rebuild your home if it were subject to a total loss.  This value is denoted as “Coverage A” on your homeowners insurance policy.  Given the current economic climate with skyrocketing inflation, supply chain bottlenecks on building materials and skilled labor shortages still lingering from the pandemic – the cost to replace your home could have increased dramatically in the past 3 years. Exterior of Home

It's time to take a look at your current homeowner’s insurance policy and revaluate your home’s replacement cost value in 2022. 

North Carolina homes are no strangers to risk.  Do the names Fran or Matthew ring a bell?  Or how about the date April 16th 2011, when tornadoes tore across the triangle area? 

The risks to North Carolina homes haven’t changed, but there’s a good chance you now have more to lose.

Remember, in the event of a loss, coverages are only afforded to the limits indicated on the policy. 

For example, let’s say you purchased your home in 2014.  When you purchased your home, your Homeowners’ Insurance Coverage A showed a replacement cost limit of $375,000.00.  Fast forward to 2022, and your home is destroyed in a severe weather event.  The cost to replace your home is $425,000.00 in 2022.  Since your policy indicates a coverage limit of $375,000.00, that is all that you would be reimbursed for by your insurance company. The $50,000.00 difference in cost would come out of pocket. 

While most insurance companies do add an annual inflationary increase on your Coverage A limit, it is often not going to be sufficient with our current economic climate. 

Give your agent a call and ask for an updated replacement cost estimate on your home.  Your agent can help determine whether an increase in coverage is necessary for you and can help make sure your home is properly protected.  An increase in premium is a small price to pay to guarantee your home is properly covered!

 
Posted 8:19 PM

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