In some cases, the coverage gap is caused by home and apartment owners are not paying enough attention to the true cost of rebuilding a house. This can be assured, particularly for older homes that may have originally many years ago. Sometimes measures for older homes will specify that the reimbursement for the reconstruction of "actual value of the house" is limited. Consequently, an older home can be very valuable to have a sentimental feeling, but the materials that were used decades ago in the course of time broken down until the true monetary value of the structure is very small compared to the cost of restoring a whole.
Home Value Versus land value
Another pitfall that homeowners in the autumn to forget that in many areas of the vast majority of the value of their house is really the price of the land under him. If you could sell your house for $ 500,000, it is tempting to believe that the house is valued for himself at this level, then your insurance would have to provide half a million dollars to rebuild after a disaster, even under a " value is only "policy.
The land under the house is easily worth 80% of this value in many areas of the United States. These include the San Francisco Bay region in California and New York City and other areas alongthe Atlantic coast. This means that your insurance would be the house as worth only $ 100,000 to look at. Can you rebuild the same home for that amount? It is very unlikely.
Replacement value
It is therefore preferable, when requesting insurance quotes and compare prices for homeowners policies that benefit the "replacement value" specifies your home purchase should be destroyed in a natural disaster. With this kind of policy that you will build up with enough money (minus deductible) in the same home once again be made available - even if the amount needed for construction exceeds the "actual value" of the house, as it currently stands.
Covered Disasters
Another wrinkle in the household insurance situation is the fact that not all natural disasters are created equal. A standard home insurance policy covers fire, but many of the things we are for the "covered by insurance as" not covered if you paid to get a special policy just for this special circumstance.