Always Consider Replacement Cost


When it comes to property insurance, you need to make sure you have enough insurance to cover your full Replacement Cost.

How Do You Know If You Have Enough Home Insurance?

Replacement cost is the cost of rebuilding your home in the event that it’s destroyed. It includes things such as the price and availability of skilled labour, debris removal, extra expense due to more demanding building codes, and more. Upgrades, renovations and other improvements can also make rebuilding a home more expensive than originally estimated, affecting the final replacement cost.

Resale or market value, on the other hand, is based on a number of factors that have no direct correlation to the cost of reconstructing your home. These include location, land value and the amount paid for surrounding homes.

It is also very important to remember that your possessions are affected in the loss of your property. Most policies cover contents up to a specific percentage of the total insured value of the property. If your dwelling is not properly insured, you may not have enough insurance to cover its contents in the event of serious damage.

To make certain you have enough insurance, here are a few tips we recommend:

Take a digital or video camera and photograph your property at least once or twice a year to have documented reminders and proof of what possessions you’ll need to replace.

Make sure you have copies of these files outside your home because if you lose your home and computer, these files will be lost as well.

When factoring the amount of insurance you need for your property and contents, remember to include the applicable taxes as the value for all replacement costs will need to include sales tax.

Whenever you increase the value of your home through renovations or the purchase of expensive contents such as sophisticated electronic systems, notify your insurance company. By doing this, you will continue to have enough insurance to cover you in the event of a loss.

The Insurance Bureau of Canada has a free online home inventory software for you to track your property’s value. This application makes creating and updating your home inventory easy and efficient. To learn more about “Know Your Stuff® – Home Inventory, the Insurance Information Institute’s free online home inventory software” (this software is no longer available, but there are others that can help you inventory your home inventory).

If you have any questions about your home insurance, please contact any of our Cooke Insurance Advisors today.

Recent Posts

Start typing and press Enter to search