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Many people have questions about insurance and their coverage. Below are links to other insurance-related sites to help answer questions you may have in regards to coverages.  Just click on the link below.

Here are examples of some common homeowners insurance questions. We will update this page frequently, so be sure to check back!

Q: What is a homeowners policy?

A: A homeowners policy protects your home against fire, wind, theft and liability.   Flood and earthquake are not covered on your homeowners policy but you can usually purchasse this coverage on  seperate policies.

Q: Are all policies alike?

A: No, there are a number of different policies and it is important to choose the one that is right for you.

Why rebuilding could cost more than new construction

Condiser these eight factors that could make rebuilding more costly than new construction.

     * Temporary Repairs.  Unlike a new home build, with a rebuild, the home may need to be boarded up or require other work to temporarily secure it.

     *  Demolition.  A repaired home often requires partial or complete demolition of the damaged structure before rebuilding can occur.  Demolition can become costly when you factor in removal and hauling of debris.  If your home has asbestos, these cost can be even higher.

     *  Building Permits.   Depending on your community, these can amount to 2.5% of total building cost.

     *  Engineering and Architectural Fees.  These can add 5% to 8% to the total cost of replacement.

     *  Code Compliance.  Upgrades to bring a home into current code compliance can cost thousands of dollars when you consider electrical upgrades, asbestos abatement, addition of tempered glass, etc.

     *  Landscaping.  Some insurance policies cover landscaping - to a certain degree.  The rebuild process can destroy any landscaping that survived the initial incident..

     *  No Price Breaks.   While homebuilders often obtain discounts on materials and labor purchased in bulk, a rebuild does not benefit from these economies of scale.

     *  Foundations.   Though rarely destroyed as a direct result of a fire, foundations often are weakened when moisture inside the concrete heats up and affects the integrity.

Your house is likely your largest investment.  To protect it, choose the insurance coverage you need based on replacement costs, not original building costs.

The items listed above can easily add 20 to 30 percent to the cost of rebuilding - even more, depending on the age and condition of the home.  Make sure your home is adequately covered by choosing its true, full-replacenet value.

This information was provided by Kemper Insurance Company.  Call us today for a quote with Kemper.

Useful Links

Here's a link to a site that discusses insurance issues and also a link to the
Alabama Department of Insurance

Home prices are down but insurance prices are up!

January 3, 2011 by Loreen Worden – Live Insurance News

It’s no secret, your home value is probably half of what it was five years ago, but you may wonder why your insurance premium is still going up. The cost to rebuild and/or repair your home, supplies, labor, etc. have not gone down, according to industry experts. These components are what insurance premiums are based upon. In fact, insurance premiums will only take the structure and liability exposure into consideration – which maybe ticking upwards based on a rise in catastrophes predicted.

“The price of homeowners’ insurance is based on the cost to repair or rebuild your home. The price of a home is based on the market value of that home and the land upon which it sits,” Robert Hartwig stated, president of the Insurance Information Institute. He also mentioned that even though the recession has been hard on the construction industry, it still hasn’t caused a major decrease in materials and labor.

In this crazy upside down market we’ve been in, some say it’s even possible for the cost to rebuild your home is actually more than the resell price.

Also, people are questioning their high loan balances compared to the insurance amount on their policy. For example, the structure coverage might only be $195,000 but your loan balance is $250,000. This has caused many to be concerned so we asked many insurance brokers and the general response was, “insurance does not insure the land but your loan includes the land. If the home had a total loss, then the insurance coverage would pay for the dwelling to be repaired…not the loan to be paid off.”

Many are struggling to keep up with their bills and found that the only way to lower their premiums is to either take a chance and raise their deductible or shop it. You may find a conversation is in line…talk to your agent to make sure all discounts are being applied.