Reconstruction Cost

In June of this year, the state of California passed new laws changing how the insurance on your home is calculated. Homes have always been insured for the amount it would cost you to rebuild, and not the market value; but how insurance companies must calculate the cost to rebuild your home has changed.  Insurance companies must now take into account the costs for debris removal, labor, and permits when calculating the reconstruction cost of homes. For many companies the biggest change is that they can no longer use square footage as the primary means to calculate the cost to rebuild your home. Everyone must now account for the quality of your home, the types of flooring you have, and the other unique features that make your home yours. If you are insured with Farmers this is not a big change. Farmers has always accounted for many of these features when calculating how much it would cost to rebuild your home. We are now using a program that can calculate the rebuilding cost with greater accuracy based on your zip code! If you haven’t taken a look at your homeowners policy in a long time I recommend making sure that your Insurer has accurate, up to date information about your home. Take a close look at what types of floors you have, and let your agent know if you have renovated your kitchen or bathrooms as these features are the most likely to have changed.

Megan Mullen (CSR)
License #0G48640

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