Replacement Cost Estimation
For many agents, it used to be simple to insure your home. They could through the carrier site access replacement cost estimation tools that will tell use based on statistical data and complex algorithms what it would cost to repair or rebuild your house in the event of a loss. A loss for many meant a kitchen fire or broken pipe when the home was damaged and needed to be repaired.
Although agents learned about this in insurance classes for licensing and continuing education, there was no course on how to deal with massive wildfires that completely wiped out their clients homes leaving nothing but a melted foundation. When an agent is looking at a claim with total loss, much more needs to be taken into consideration.
One of the biggest errors agents make is depending the replacement cost estimation tools as the final word on what a house should be insured as. At Argos Insurance Services, our owner and broker, Joel R Alexander has had experience in both the real estate and lending industries prior to selling insurance, so he understands home inspections, appraisals and replacement cost estimation and takes pride in insuring homes of many styles. Most likely you will find that other insurance agents will insure your home for less thus giving you a lower cost.
At Argos Insurance Services we will not insure a home in Sonoma County for less than $300 Square Foot. This is the lowest that we will go and in many cases you will find us insuring homes for much higher per square foot levels. A good example would be homes in San Francisco, which will start at the $450 per square foot level and go quite a bit higher based on where they are located and how they were built. Many SF homes have walkout basements and basement garages. These attributes can add quite a bit of cost when reconstructing from the ground up. You will hear us use words like Extended Replacement, Ordinance and Law and Personal Property Replacement.
There are many things to consider when insuring a home and it is our job to make sure that it is done properly so you will hear us asking a lot of questions that many agents who have you dealt with in the past have not. Questions like what types of flooring do you have in your home, have you renovated any rooms, do you have crown molding, what type of siding do you have and is that redwood deck or Trex. These are just a few of the many questions we will ask. Each item is being entered into software that will take into effect the current cost of these items and will also compare current labor rates in your area for contractors and specialty contractors.
There are many areas of coverage that many people were not well versed in prior to the Valley(2015) and Tubbs(2017) massive wildfires. A great example of this is a coverage called Debris Removal. This is the coverage that will pay for clearing your property after a total loss of your home, cars and any other structures on your property. Most people had Debris Removal coverage of 5% which for a home with a replacement cost of $500,000 is only $25,000. Based on our experience from our clients who lost homes, the cost ran more in the $50,000 level. Luckily all our clients had a special endorsement on their policies with Argos Insurance that provided them an additional 20% for Debris Removal. This addition added $100/year or less to their policies.
More info to come. Thank you.