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Home » Does My Home Have Enough Coverage to Rebuild
November 8, 2018

Does My Home Have Enough Coverage to Rebuild

Home on Fire

Loosing your home due to wildfire is devastating. 

Even more devastating is discovering you don’t have enough insurance to rebuild.  Your local insurance agent can help you determine what amount is needed, but factors that affect the cost to rebuild  at the time of loss, (such as current cost of labor and materials, permits, designs) can vary greatly.  This makes it almost impossible to determine the exact amount needed when writing a policy. And over time these costs change which cause the limit of insurance to get skewed.

Use Reconstruction Software to Help Determine Reconstruction Costs

There are many software programs available to help determine the amount of insurance to place on a home insurance policy, but like any other analytical program….it only gives a correct answer, if accurate variables are input.  In this case the variables that need to input correctly are the reconstruction features of the home. 

Make sure your agent asks lots of questions about your home’s features

Here at Denver West Insurance Brokers, we do the necessary research on each home quote we provide.  We use online tools such as prior sales listings, county assessors’ websites and client interviews to get all the construction features of the home input correctly into the reconstruction software.  Features such as square feet, roof type, flooring type, number of bathrooms, construction quality grade are important variables to determine the right amount of insurance to replace a home. Then after the software calculates an estimated amount of insurance, we double check it with known current labor and material costs in the Denver region and State of Colorado.

How does inflation effect the limit of insurance to replace my home?

Almost all (but not all) home policies are automatically evaluated at each renewal.  The carrier software will consider current labor and material costs in your zip and increase the limit of insurance on your home policy automatically.  This is inflation protection for you…it’s a good thing.  But this increase in coverage can also increase the cost of the policy.

It’s the homeowner’s responsibility to participate in making sure their home is insured to rebuild!

The best way to ensure your home has enough coverage to rebuild if needed, is to PARTICIPATE in the process!  Below are the ways a homeowner can do this:

A.      Stay current on current labor and material costs in your area, by talking to friends, neighbors, relatives or anyone you know in the construction business.    Usually contractors estimate by sq./ft.

B.      Pay attention to ‘Coverage A – Dwelling’ limit of insurance on your home insurance policy.    Divide that amount by the above ground square of your home to get the $ Amount /sq. ft

This amount is the amount of insurance you have reconstruct your home.


C.      Every couple of years, or every year if you live in the mountains around Denver and are exposed to a wildfire risk, call your local insurance agent and ask them to analyze your current

 Cov A- Dwelling limit and be willing to pay more if you need to increase that limit. 


For most people, their home is their most asset so it’s very important to make sure you have enough insurance money to rebuild it if you unlucky enough to do so.  Denver West Insurance Brokers is located on the west side of Denver in Golden CO. We service the surrounding towns of Lakewood, Arvada, Wheat Ridge, Morrison, Littleton and Evergreen.  Give Us a Call.  We are happy to assist you with your insurance needs.



Tags: home insurance, home owners insurance

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