Don't let the title of this post fool you. We want to make sure you can say, "I CAN afford to rebuild my home." We've said it before and we'll say it again . . . your insurance agent has to get the dwelling amount coverage on your insurance policy accurate.
Get it right and it will serve as the hero in the story when your world gets rocked, say in the event of fire or tornado damage that destroys your home. Get it wrong and it's kryptonite to your ability to rebuild your home.
If you've noticed anything about Texas real estate over the last 5 years, building a house is a lot more expensive than it used to be.
Land and structure costs in Texas are on the rise for a variety of reasons. Supply and demand are two-stepping right now where expensive homes are in supply and those with the purchasing power are buying.
After a catastrophic event destroys your home, it's tough enough knowing you'll have the added trouble of replacing your belongings. How do you know if you have enough dwelling coverage on your insurance policy if you find yourself in a terrible situation needing to rebuild?
An Educated Guess
Though there is no exact formula to pinpoint an exact failsafe amount, a solid estimate will serve you well when determining an approximate dwelling coverage to feel good about. Wait, didn't you say accuracy is the key?
Yes, yes it is. And you should always aim for the bullseye while knowing the best tool you have at your disposal is a solid estimate.
Here are some things to consider.
What to Consider
You need to know what exactly you will have to rebuild and making sure you have the square footage as part of the calculation is step 1.
This will help to determine the material amount required to rebuild the structure.
The foundation plays a role. Because of the mix of homes in Texas and the variety across the board of when they were built, it's safe to say no foundation is the same. Different methods come into play depending on the year the home was built.
Believe it or not, neighborhoods matter. It doesn't take driving around too long to see the stark contrast between ranch homes in Colleyville and new builds in Grapevine.
Next, the formula gets very granular, taking into account how many stories and rooms. Everything from ceiling height to flooring is taken into account to determine as much as possible about the value of your home.
The more thorough, the better.
So How Much Will it Cost?
Expect to rebuild your home somewhere in the vicinity of $90 to $100 per square foot at present.
Knowing the pricing of materials can fluctuate (Hurricane Harvey sent prices of materials soaring due to low supply and high demand), this is a good range to expect. We're not talking market value here, we are talking about the cost to rebuild. So, at the top end, a 3,000 square foot home needs rebuilding, expect it to cost $300,000.
Honestly, not every insurance carrier or agent is guaranteed to provide an apples-to-apples assessment as you shop for coverage. Though they should be as thorough as possible, they may weigh certain factors differently when calculating.
At Insurance For Texans, we make sure the calculation makes sense to you. Knowing we have access to a variety of coverage options as an independent insurance agency, we feel confident to find you a great value on your insurance without sacrificing coverage.
Give us a shout and we'll sort it out.
Stay covered, Texas.