Nationwide mailed out a letter to everyone that has a homeowner’s policy with them. This letter is titled “Get extra coverage for extra piece of mind”. This letter focus’ on the replacement cost coverage that you can have on your home. Most companies offer two percentages, for example 125% or 150%. Nationwide is now also offering 200% replacement cost. You might be asking yourself what this replacement cost coverage is that I am talking about.
Let’s think of a hypothetical situation now. You have a beautiful home, it’s insured at $545,000. Now days typical rebuild cost per square footage is anywhere between 175-250, of course the more upgrades you have in your home, the higher the cost per square footage is. Now let’s say a wildfire goes through the area and your home burns to the ground, and nothing is left. You start thinking about cost to rebuild your home and if you have enough coverage. You remember that you have the 150% replacement cost coverage on your home, and you have building and ordinance coverage on your home as well.
Now let’s work on what the numbers all mean. Since your home is insured at $545,000 and you have replacement cost coverage on your home at 150% this means that if you wish to rebuild your home, and cost to rebuild exceed your dwelling limit you would have up to an additional $272,500 to help with rebuilding. Also, you have building and ordinance coverage on your home, typically this is around 10% of your dwelling limit, so this coverage would also provide an additional $54,500 worth of coverage to help rebuild your home up to new code enforcement standards.
Some companies have stipulations on what percentage for replacement cost coverage you can have. For instance, when your home was built, or just what that company offers.
If you ever have a question about what replacement cost coverage you have on your home, please give us a call and on of our agents can go over the details with you. Attached below is a copy of the letter that John received.
by Amy Morse
theworldaccordingtojohnnie 