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Call your insurance agent. Your home isn't covered like you think it is.

Building materials and labor costs are up. This means it will cost much more to rebuild your house if something happens, and you're not covered for that.

The price of houses is up, the price of materials to build a new house is up. If you own your house and don't care to leave just yet, you're probably thinking none of this affects you, but you'd be wrong.

“We're starting to see companies make adjustments on your homeowner's insurance coverage policy to more accurately meet the reconstruction costs that are out there,” said Christopher Cook from Alliance Insurance Services.

Do the math. If your home is insured for $200,000, there's usually an inflation guard of 25%, making the total insurance coverage $250,000.
The problem is, the cost of materials and labor has outpaced this 25%.
This means today, it might cost $400,000 to rebuild your home, but you're only insured for $25,000, for example, and that's how much insurance is going to pay.

“A tree falls on a garage. And now 2x4's have gone up 300%. You still want your garage fixed. You want your two-car garage, not a one-car garage. In order for your insurance company to fix your garage they have to buy the 2x4's at today's cost,” Cook said.

The bottom line? You need to reevaluate how much your home is insured for in reconstruction.

“That will make your premium go up, but we want to pay your claim when you have one and we want to pay it right,” Cook said.

It's time to call your insurance agent and make sure you're covered the way you think you are. If you added on to the basement, attic, patio, did a kitchen remodel over the last year or so, this is extremely important for you.


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