Is home insurance dwelling coverage the amount they will actually rebuild?
Question:Assume my home insurance policy has $200,000 dwelling coverage, but my home is only worth $130,000. If my home burns down, will they rebuild up to a $200,000 home or only replace what my home was?
For example, if my current home only has 1 garage stall, would they build my new home with 2 garage stalls?
Answers:
They will only replace what your home is actually worth. It doesnt matter how much you had it covered for. If you insure it for under the amount it is actually worth, you will only recieve the amount that you insured it for. Its important to habe the exact property value, or atleast round it to the next thousandth. You should reevaluate the value every year because of inflation
Check the policy. Some only do the amount you paid for the house while other policies have replacement payouts. (the cost to rebuild to what you had) I am not aware of any that would pay for more than you have now.
Homeowner policies vary tremendously. Read you policy, or check with the insurance company for a plain English explaination. Many people have had nasty surprises when thay need to make a claim. You are doing the right thing by learning beforehand.
They'll pay you as little as possible. Keep records of all your belongings. Especially valuables.
Make sure you have replacement value insurance. Then they can't pro-rate/de-rate the value of damaged goods. Mine paid for itself the first hailstorm.
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