Is Your Home Fully Protected?

It's an alarming fact that home values in California have plummeted in recent years.  Here in the Central Valley, it may be one of the best times in history to purchase a home.  In some cases, homes that appraised for $400,000 3 years can now be bought for as little as $200,000.  Unfortunately, many of these homes are coming out of foreclosure.  

Here's another fact.  Current market values compared to new building costs are as far apart as they've ever been.  In other words, while you may be able to buy a home now for $200,000, it may cost as much as $300,000 or more to build it new.  And if this same home were to be destroyed by fire, it will cost even more to rebuild.  

Here's why.  It's more expensive to rebuild a home after a disaster (like a fire) than it is to build the same home new on a bare lot.  This is why it is important to insure your home for its "full replacement cost" value.  A professional insurance agent can help you determine the correct amount by the use of a "replacement cost calculator". 

You may recall the most recent large wildfires a few years ago in Southern California.  When the smoke cleared, the Department of Insurance Commissioner estimated that up to 40% of homeowners were not able to rebuild because their homes were underinsured.  What a shame!

If you're a homeowner, be sure to insure your home for its full replacement cost value.  And, work with a professional insurance advisor who can recommend the right kind of protection and policy that matches your needs.  You'll find it doesn't cost any more to get it right.