Will the Insurance Company Cover Home Reconstruction Cost?

The home is a safe haven, an ideal place to relax and unwind; a place to spend free time in between work and other activities. Sometimes, Mother Nature can become extremely brutal, hitting us hard with severe disasters including thunderstorms or high winds. Staying within the confines of your home protects you from harm. But some disasters are so strong, you need to evacuate and go elsewhere to ensure the safety of you and your family. While you are away, the disaster may have caused serious damage to your home. In such a case, you will need to contact a disaster restoration company in Plano for the reconstruction job. In some instances, your home can be severely battered and the only viable option is to rebuild. 

If your property is insured, you may feel a little more at ease when it comes to handling the financial burden associated with the reconstruction. So how will your insurance company help out? What role will they play?

Insured Value vs. Reconstruction Costs

When you are planning to reconstruct your building due to a disaster, it is referred to as an emergency situation. Your beautiful home is no longer habitable, so you have to look for a temporary shelter for you and your family. 

Due to the emergency aspect, you are short of time to get the right material, products, and services needed for reconstruction. Your insurance company will go with any building material regardless of price. Even though it doesn’t seem right, it helps ensure your property is restored as quickly as possible. 

This means the reconstruction costs will most definitely exceed the value of the standard coverage, meaning you might need to pay extra. 

Coverage Type

The relevance of homeowner’s insurance policy cannot be overemphasized. If you are considering reconstructing after a disaster, the insurance value of your home coverage will not always be sufficient for your property. For instance, standard coverage covers fire, hail, and windstorms, but floods and earthquakes are often excluded. 

So, make sure you choose the right coverage that caters to your specific needs. 

Vulnerability to Natural Disasters

If you are living in an area susceptible to natural disasters like tornados, and hurricanes, then you should consider increasing the value of your homeowner’s insurance coverage. Otherwise, any damage outside the policy is not the responsibility of your insurance provider. In other words, you will have to set aside another budget to fix the damage yourself.

Home Insurance Coverage Endorsements 

Consider adding the following coverage options if you live in a disaster-prone area.

Extended replacement cost: This endorsement extends the limit when your standard coverage is nowhere near the cost of reconstruction services. Your home becomes insured for a certain value, usually 20 – 25 percent. 

Guaranteed replacement cost: This option covers the cost of reconstruction services, so long as the conditions align with your home insurance policy. 

Take a look at your home insurance policy to see what coverage it provides before a disaster strikes. Check to see if you have enough coverage for repair and reconstruction services. 

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