IS YOUR HOME PROPERLY INSURED?

(This is not an advertisement to sell you insurance; we do not sell insurance.)

IF THIS HAPPENED TO YOUR HOME…

…would your insurance policy give you enough money to rebuild your home?

ARE YOU SURE???

Other than your family, your home is the single most important item in your life.  Shouldn’t you be sure your home is insured for the proper amount?  To have peace of mind, we need to know that if our family suffered a catastrophic loss, we could rebuild our home to its “pre-loss condition”.

The first step to make sure your home is insured correctly is to understand some of the terms insurance companies use.

1. What is Actual Cash Value? (ACV)           

2. What is Replacement Cost Value? (RCV)

According to a guide printed by the Pennsylvania Insurance Commissioner (10/2005) entitled, “Your Guide to Homeowners Insurance”, on Page 6 it states: 

“Actual Cash Value is the replacement cost minus depreciation (decrease in the value due to age, wear and tear since the time the structure was built or purchased).”

“Replacement Cost is the amount it would take to replace or rebuild your home or repair damages with materials of similar kind and quality without deducting for depreciation.”
                                                                     Source: www.ins.state.pa.us

It is essential that your RCV be accurate!

If it is too high, you will be wasting money on coverage on which you cannot collect; too low, and you won’t have the money to rebuild. In addition, if you are insured for less than 80% of replacement cost, the insurance company will charge you a large penalty on every claim submitted.  This is called the 80% Rule

If you have an older home, the inflation factor built into your policy may not be keeping up with the rise of building costs.

If you have a brand new home or recently purchased your home, you might be paying insurance premiums based on the market value of your property and not the replacement cost of your home.

THE BIG QUESTION IS:

HOW DO I DETERMINE THE REPLACEMENT COST OF MY HOME?

This is how it generally works:

1. A real estate agent usually recommends you insure your home for the purchase price.  However, the purchase price has little or nothing to do with replacement cost.  The purchase price does not account for the rising cost of building materials for today or in the future.  The purchase price is determined by the value of comparable homes in the market place and not on construction costs.

2. An insurance representative might give you an accurate number if they have access to the information utilized by the insurance company.  However, usually they ask, “What did you pay for it?” or “What is it insured for now?”.

3. A builder or a contractor could estimate the cost to rebuild your home.  However, few builders or contractors are willing to supply estimates outside the bidding process.  Those who are willing to give an estimate charge hundreds of dollars in fees.

OR…

Wouldn’t the best alternative be to use the actual process the insurance companies use?

Now you can!

We at Red Rose Inspections have provided thousands of home inspections to determine RCV’s for the insurance industry.  It is now possible to provide the same service to you. 

The process is simple. At your request, we visit your property, take the necessary measurements, and collect the pertinent data.  Then, using the same methods we use for insurance companies, we calculate your RCV and provide you with an electronic report in a .pdf file format.

This is NOT a market evaluation of your home. It should be used for insurance purposes only.  But…you can have peace of mind in knowing that your home is insured for the correct amount. 

FAQ'S (Frequently Asked Questions)

HOW DO I GET MY EVALUATION?

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