| Structural Insurance |
| Written by Ethan Hawke | |
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Home insurance is also called hazard insurance or homeowners insurance. This property insurance covers your home and includes several different types of coverage. Structural coverage is only one of the areas a home insurance policy would cover. Other insured areas include the loss of use, the contents, or loss of other personal possessions that belong to the homeowner. Your home insurance will also cover your liability for accidents that may happen on your property. This type of insurance covers the home owner if at least one of the owners or named insured, lives in the home. The insurance for income property, like a house you rent to someone else, is different. Structural Insurance – General DescriptionStructural coverage is the section of your insurance policy that will repair or rebuild the house itself. Last spring, the pipes under the sink in our kitchen had a slow leak that we didn’t hear, or see. We didn’t know until the ceiling in the room under the kitchen collapsed and dumped water all over everything.Structural insurance is what paid for the damage under the sink, the damage to the kitchen floor and the replacement flooring, the ceiling and wall and window repair downstairs, and to have the carpet downstairs dried and cleaned. It paid for the contractor, the paint and the tile flooring. And because we have a landing in site of the kitchen with the same type of tile, our structural insurance portion of our home owner’s policy paid to replace that tile to match the kitchen. Your typical policy will cover damage done by fire, lightning, tornadoes, wind storms, hail, explosions, smoke, vandalism and theft. It does vary by policy so make sure and read yours. What Isn’t CoveredIt is important to read your insurance policy. Structural coverage can vary by area of the country and many things aren’t covered. The exclusive term used to be ‘Act of God,’ your structural damage wasn’t included as part of your homeowners insurance if there was an ‘Act of God.’ Now the exclusions are specified as types of geological damage.Regular homeowners insurance typically does not cover the following: flood and earthquake, expansive soil, hurricane, landslides and subsidence damage. Okay, I had to look that one up. Subsidence damage would be caused by the gradual settling of the ground as a result of earth movements, mining operations, etc. Expansive soil means that the soil type in your area might shrink or swell with the addition or subtraction of moisture. There are riders available to your insurance policy that would cover at least some of these things. Earthquake or flood insurance for instance. How much Structural Coverage do I need?You need enough to cover the cost of rebuilding your home if it is deemed a total loss. It is suggested that the coverage be 100% of the replacement cost. But there are options out there for say, 80% of the cost to rebuild. You don’t include the cost of the land. Just the structure and outbuildings if you have something like a detached garage, workshop, or other structure. You can’t base this insurance coverage on what you paid for the house. Rebuilding costs may have gone up or down and your house price generally includes the lot or acreage.You can’t depend on the market value of your home, either. The price you might be able to sell the home for might be an entirely different amount than what it takes to rebuild the home. If your home is totaled by fire or some other reason, you will only receive the amount specified in the coverage. If your home is insured for $100,000 and it costs you $150,000 to rebuild it, you’ll only get $100,000. If you have custom tile or counters and bathroom fixtures, you may need to have a builder come out and give you an estimate of what it would cost to build the house today based on replacement costs. When we bought our home, it had an unfinished basement. We have since added two bedrooms, a three quarter bath and a laundry room. If we hadn’t increased our structural insurance coverage, the replacement value would have covered the house as it was when we bought it and wouldn’t have included money for the finished basement. If your home is fairly standard and you don’t have a lot of custom upgrades, then one way to figure out how much coverage you need is to get an average price for the square-foot building costs in your area. Search the internet, or simply call a builder or a realtor. They are used to getting these types of calls so should have the figures in hand. Once you have the amount, multiply it by the amount of square feet you have in your home. This is approximately what it would cost to replace your home today. |
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