Many of our clients at Access Insurance Services are surprised to learn that their homeowners’ insurance in San Antonio, TX is based on the 80% rule. In short, this rule stipulates that your insurance should cover at least 80% of the replacement cost of your home.
How to Determine the Replacement Cost of Your Home
The first step in determining whether or not you have adequate coverage is to calculate the replacement cost of your home. This can be done by contacting a local builder or real estate agent and asking them for an estimate. Once you have an estimate, add 10-20% to account for any unforeseen costs that may arise during rebuilding.
For example, let’s say your home is estimated to cost $200,000 to rebuild. In this case, you would want to carry insurance that covers at least $220,000 – $240,000 of damage.
If your current coverage falls short of this amount, you’ll need to consider increasing your coverage or finding a new insurer who can provide you with the coverage you need at a price you can afford.
The 80% rule is essential when purchasing homeowners insurance in San Antonio, TX. By ensuring that your policy covers at least 80% of the replacement cost of your home, you can protect yourself from being underinsured in the event of a disaster. If you’re unsure whether your current policy meets this standard, we recommend contacting a local builder or real estate agent for an estimate of your home’s replacement cost. Then, add 10-20% and compare it to the amount of coverage provided by your homeowner’s insurance policy. If you have questions, contact Access Insurance Services about increasing your coverage.
