Do You Have to Insure Your Home for Replacement Cost and Is It Worth It?

For homeowners looking into home insurance coverage, a common question asked is ‘do I need to insure my home for replacement cost’ and ‘is this coverage worth it?’. Here’s what you need to know about home replacement cost when considering your home insurance coverage.

Do You Have to Insure Your Home for Replacement Cost?

If there is a mortgage on the house, yes; most financial institutions require you to carry replacement cost coverage on your policy. If there isn’t a mortgage, there are various options you can select including actual cash value or replacement cost coverage.

Is Replacement Cost for Homes worth It?

If you’d need your home fully repaired or replaced in the event of a loss, without consideration of depreciation, replacement cost is worth it.  If you’re not interested in full repair or replacement, selecting actual cash value over replacement cost may generate savings in premium.

Replacement cost coverage is designed to put you back in the same position you were in prior to the loss.  If your house needed to be rebuilt from the ground up in the event of a total loss, replacement cost coverage is the coverage you’ll need to ensure your home is fully rebuilt.

Replacement Cost Ensures Your Home Will Be Replaced Back to Its Original Condition

Unlike actual cash value coverage, depreciation is not calculated for replacement cost coverage.  It is for this reason that financial institutions require homeowners to carry replacement cost coverage on their policies.  Although replacement cost coverage may result in slightly higher policy premiums, it also ensures your home will be repaired or replaced with a residence which is as similar as possible to the original house, before the loss, utilizing current methods, materials and workmanship.

Replacement cost is the most popular coverage choice and is the recommendation of most insurance agents and brokers; however, outside of your mortgage provider’s requirements, you do not have to have replacement cost coverage.  A conversation with your insurance provider can help determine which coverage choice will best suit your needs.

Estimate Your Home Replacement Cost with The Douglas Residential Cost Guide

After determining if replacement cost coverage is right for you, the next question will be, ‘how much should my replacement cost be?’  This is a question that can be answered very simply using the Douglas Residential Cost Guide. The Douglas Residential Cost Guide has been developed by leading industry experts with over 30-years of valuation experience. The residential cost guide has been developed by Canadian’s for Canadians, using Canadian market data and trends.  User-friendly and trusted across many industries, Douglas Residential Cost Guide is replacement cost made easy. Visit Douglas Residential Cost Guide today to get started.

Everything You Need to Know About the Replacement or Rebuild Cost of Your Home

Estimating the replacement cost or rebuild cost of your home can seem like a cumbersome task, but it’s an essential step all homeowners should complete. Here’s everything you need to know about determining the rebuild or replacement cost of your home.

How Do You Determine the Replacement Cost of Your House?

Homeowners often wonder how you begin the process of determining your home replacement cost.

Home replacement cost is calculated by gathering the details of your home, as previously discussed, and attaching a dollar value to the elements that then translate into a building cost per square foot. This dollar value is not only comprised of material costs, but also factors in labour, inflation, market trends and conditions, as well as pricing in your specific geographic location.

Why Is It Important to Calculate the Rebuild Cost of my House?

Homeowners often wonder why and when they need to calculate their home rebuild cost. While insurance purposes may be the most common reason to calculate your home’s replacement cost, there are several different reasons that a replacement cost value may be required:

  • Insurance coverage recommendations
  • Settlement of residential insurance claims
  • Financial management
  • Accounting functions
  • Budgeting for new home construction
  • Assisting with obtaining financing
  • Assisting in the settlement of disputes/litigation

How Often Should I Calculate My Home Replacement Cost?

To ensure your home’s replacement cost is accurate, calculating your replacement cost every few years to accommodate for inflation is advised.  Any time major changes to your home have been completed, such as extensive upgrades or square footage changes, your home’s replacement cost should be recalculated to ensure the true value of your home is accurately captured.

Life Events Where You May Want to Calculate Home Replacement Cost

There are several different life events that you may find require you to calculate your home’s replacement cost, such as:

  1. Purchasing a new insurance policy
  2. financing your home
  3. budgeting for an extensive renovation or home expansion

 

Ways to Get a Replacement Cost Estimate for Your Home:

In addition to replacement cost calculators used by insurance companies, there are a few different ways you can calculate your home’s replacement cost:

    1. Insurance Companies or Brokers

      Insurance companies can determine this through calculator programs they use to determine your home’s replacement cost. When setting up a new homeowner’s policy your agent or broker will take you through a list of questions about the size, construction and finishes of your home. Based on the responses to these questions, their system will attach a dollar figure to each of the answers that will ultimately lead to your home’s replacement cost.

      Of course, leaving your home’s replacement cost up to an unfamiliar system, or a singular entity can also be a bit nerve-wracking. Many choose to explore secondary options to calculate home replacement cost. Trusted online calculators, such as the Douglas Residential Cost Guide, are an excellent way to walk through replacement cost questions at your own pace, see the details first-hand, and get a second opinion on what exactly it would cost to rebuild your home.

    2. DIY Method to Calculate your Home Replacement Cost

      The DIY method for home replacement cost calculation is the most hands-on option, and what you save financially, you’ll pay for with your time. The DIY method to calculate your home replacement cost can be a cumbersome task, where you must consider a wide range of factors relating to the construction of your home. It may require you to get in touch with your local homebuilding contractor to determine the building cost per square foot for your geographic area. Multiplying your home’s square footage by the building cost per square foot will give you a basis for your home’s replacement cost.

      Additional factors that you may need to consider in order to estimate your home replacement cost are upgraded flooring, cabinets, fixtures and appliances, roofing, and exterior features.

    3. Online Home Replacement Cost Calculator

      Recognizing that the DYI method is a time-consuming process, many have developed online home replacement cost calculators.  Some are more accurate than others and some are free for use while others charge a small fee. There are various types of online options, some choices pull public information on your house based on your address and geographic location to generate a replacement value, while others ask for specific details of your home and generate a replacement cost based on the information provided.

    4. The Douglas Residential Cost Guide

      Trusting the source of your selected online calculator is important.  A company with appraisal, insurance and industry experience should be selected to ensure the most accurate calculations. The Douglas Residential Cost Guide has been developed by industry experts with over 30 years of appraisal and valuation experience.  It has been developed by Canadians, for Canadians, using Canadian data, market trends and research. The Douglas Residential Cost Guide is a trusted valuation tool utilized across many industries including financial institutions, lawyers, accountants and numerous corporations. Check out the Douglas Residential Cost Guide today to calculate your home’s replacement cost.

    5. Appraiser

      Another source for calculating your home’s replacement cost is to have an independent appraiser evaluate your home. An appraiser will complete a thorough examination and inspection of your home documenting the details and taking photos and videos. The appraiser will evaluate everything from floors to ceilings, walls and wall height, foundation, footings, siding, lighting, plumbing, electrical, heating/cooling, square footage and specialty features.  After thoroughly documenting all the details, the appraiser will provide you with your home’s replacement cost value.

What Do I Need to Do to Estimate the Replacement Cost of My House?

Whatever method chosen to calculate the replacement cost of your home; the first step is to gather the proper information to ensure all the details of your home are captured correctly.

Home Replacement Cost Determining Factors

Home replacement cost is calculated using a variety of determining factors such as:

  1. The year your house was built is largely important, for estimating Actual Cash Value.
  2. The year of any significant updates, additions, or changes will also be relevant.
  3. Is the foundation block or concrete, drywall, or plaster walls?
  4. The type of plumbing and wiring is also important.
  5. The amperage of electrical service
  6. The type of your heating/cooling unit
  7. The square footage of the home
  8. How many bedrooms
  9. How many bathrooms
  10. Any specialty details such as wired-in alarm or surround-sound systems are also relevant.

Consider the Finishes When Determining Your Home’s Replacement Cost

In addition to all the basics, you’ll need to ensure the finishes are captured correctly. The type of flooring and countertops are considered, the style, type, and the number of windows in the home, as well as the style, type, and number of light fixtures, will all need to be captured. The level of detail may seem overwhelming but armed with your new home’s market listing and a few mental trips through your house will allow you to calculate your home’s replacement cost rather quickly.

Accurately Estimate Your Home Replacement or Rebuild Cost Using the Douglas Residential Cost Guide

Your home’s replacement cost is the cornerstone of home insurance policies and can assist in several different areas.  Ensuring your home’s replacement cost is up-to-date and accurately captured is imperative to ensuring your home is properly protected.  With over 30 years of valuation and appraisal experience in Canada, the Douglas Residential Cost Guide has been specifically designed for Canadian homeowners.  Our leading industry experts have developed a finely-honed valuation system designed to accurately capture Canadian’s home replacement cost in a consumer-friendly format.  Let the Douglas Residential Cost Guide calculate your home’s replacement cost today.

Am I Properly Covered by Homeowners Insurance?

New homeowners often ask themselves, ‘am I properly covered by home insurance?’ and ‘what should home insurance cover?’ These are common and often nerve-wracking questions to ponder when making coverage choices for your home or reviewing your homeowner’s policy.

There are so many factors to consider:

  • Do you have a basement in your home, should you consider flood insurance, does your insurance company offer flood insurance in your area?
  • How much liability coverage should you have?  Is $1 million enough these days or should you consider $2 million?
  • What if the hot water tank lets go?  Will you be covered for that?
  • What if you have a break-in, what’s covered and what’s not?  Are there limits to these coverages?
  • Of course, most importantly, what if there is a fire?  Is there enough coverage in place to replace your home?  Do you want to replace your home?

Homeowners insurance and its various coverages often lead to homeowner’s feeling unnecessary stress and pressure to ensure their home is covered properly. The good news is, armed with the right tools, like the Douglas Residential Cost Guide, and the right agent/broker, understanding how much homeowner’s insurance you need can be made straight forward and provide peace of mind.

Decide What Homeowner’s Coverage Is Right for You

The biggest determining factor in ensuring your home is covered properly is to decide which type of homeowner’s coverage is right for you.  Are you at the point where you’re no longer interested in replacing your house if something happened?

Actual Cash Value Coverage

If you don’t need or desire to replace your house in the event of a loss, actual cash value coverage may be an option best explored. Actual cash value will provide a payout in the event of a loss; however, it factors in depreciation and will not provide enough funds to replace the house in the event of a total loss.

Replacement Cost Coverage

If replacing your home is your highest priority, replacement cost coverage is the best way to proceed.  Replacement cost coverage will cover any losses to your home up to the replacement value of your home.  Depreciation is not considered with replacement cost coverage; the coverage is in place to simply replace what has been lost.

Determine Your Homes Replacement Value

What if my replacement value isn’t enough to replace my home?  This is one of the biggest fears any homeowner has when pondering insurance. The best way to ensure your home is protected properly is to ensure your home’s replacement cost coverage is calculated correctly.  Douglas Residential Cost Guide can help.

The Douglas Residential Cost Guide has been carefully crafted by industry experts with over 30-years of valuation experience in Canada.  Utilizing the Douglas Residential Cost Guide to help navigate the questions your insurance provider will ask and allows you to compare calculations with an outside source to give you peace of mind that your replacement cost number is accurate. You can also speak to your insurance provider about guaranteed replacement cost insurance.  Some companies provide guaranteed replacement cost insurance as a guarantee that they will replace your home in the event of a loss.

Guaranteed Replacement Cost Coverage

Guaranteed replacement cost coverage ensures your home will be repaired or replaced to put you in the same position you were in prior to the loss, regardless of the cost associated with the repair or replacement.

Of course, some insurance companies’ guaranteed replacement cost coverage is not available to homes over a certain age, or is not true guaranteed replacement coverage, but a promise to pay a specific percentage over and above the replacement cost value of the home, if necessary.  If you’re interested in guaranteed replacement cost, asking your insurance provider what limitations/stipulations are outlined for this coverage is best.

Basement and Flood Coverage

Given common weather patterns across the country, basement and flood coverage is at the forefront of many insurance discussions. Are you properly covered in the event of a flood or sewer back-up?  More importantly, what is the difference between flood coverage and sewer back-up coverage?

Sewer Back-Up and Sump Pump Coverage

Sewer back-up coverage is coverage put in place to cover water in your basement that stems from a sump pump malfunction or a toilet or drain overflow. Flood coverage is coverage put in place to cover damage from water that seeps in through the walls, up through the floors, or comes through a window or under a door. If you fear losses from either type of event, asking your agent/broker about sump pump coverage and its limitations is a must and enquiring about flood insurance in your area is a wise choice.

Content Coverage

What if there is a break-in?  Homeowner’s policies include special limits for contents coverage and can be subject to special limits in the event of stolen property. It is important that you discuss these limitations with your insurance provider to ensure ample coverage is in place.  There may be a limit to how much can be claimed against your policy for jewelry, fine arts or furs.  If the limits within the homeowner’s policy is not enough, a personal articles policy may need to be explored to cover any specialty items.

Discuss Liability with Your Insurance Company

Determining a liability amount is best discussed with your agent/broker. Most insurance companies will not insure a home with less than $1 million liability; however, carrying upwards of $2 million is not uncommon and should be explored based on your lifestyle and family needs.

Determine Your Home Replacement Cost with The Douglas Residential Cost Guide

The most important thing to remember when reviewing your homeowner’s policy, or shopping for new insurance is to take your time, ask questions and review the fine print. Starting with an accurate replacement cost value for your home is the best place to begin. Most of the coverages within your homeowner’s policy are based on a percentage of the calculated replacement cost value of your home; even if you have chosen actual cash value coverage, replacement cost is still calculated and used as a baseline within your policy. Now that you’re armed with the right questions and know where to start, it’s time to take action. Learn more about the Douglas Residential Cost Guide today to get started!

What are my Options when it comes to Home Replacement Cost?

For homeowners, a common question asked regarding home insurance and home coverage options is ‘what are my options when it comes to home replacement cost?’

Simply put, when it comes to home replacement cost, there are two options: replacement cost and guaranteed replacement cost.

Replacement Cost and Guaranteed Replacement Cost

Both replacement cost and guaranteed replacement cost are coverages designed to put you in the same position you were in before experiencing a loss. Both types of replacement cost do not take into consideration depreciation; they simply repair or replace damage in the event of a loss. For example, if you experience damage to your 10-year-old shingles due to wind damage, both replacement cost and guaranteed replacement cost will pay to have your shingles repaired or replaced; they do not factor in that your existing shingles are 10-years-old and no longer hold the same value as new shingles, they simply replace the damaged shingles with new ones.

Coverage for Total or Partial Loss of Your Home

If you experience a total loss and your home has to be re-built from the ground up, both replacement and guaranteed replacement cost will rebuild your home. What’s the difference between replacement cost and guaranteed replacement cost?

Replacement cost insurance pays to repair or replace your home in the event of a loss; however, the repair or replacement is covered up to the limits of the replacement value, as stipulated on your home insurance policy. For example, if the replacement value of your home is stated to be $300,000, on your home insurance policy, and you experience a total loss, replacement cost insurance will pay to have your home rebuilt up to a maximum limit of $300,000.

Determine the Replacement Cost of Your Home

What if the calculated replacement cost is not enough to cover the full rebuild of the home?  This can be a large fear for any homeowner.  After all, you pay a lot to ensure your home is covered properly, the last thing you want to hear after experiencing the trauma of losing your home is that the rebuild cost has exceeded your policy limits and the excess rebuild cost over the limit stated within your homeowner’s insurance policy will not be covered. This is an unlikely event, but can happen, which is why calculating the replacement cost of your home correctly is so important.

Guaranteed Replacement Cost

If you’re still uneasy about calculating replacement costs, fear not, there is the option of guaranteed replacement cost coverage for homeowners to consider as well.

Guaranteed replacement cost is exactly as it sounds: it is a guarantee that your home will be replaced to its former state, prior to the loss, with no limitations. Guaranteed replacement cost is an insurance company’s promise to put a homeowner back in the same position they were in before a loss, regardless of the cost.

For example, if you experience a total loss and the stated replacement value of your home is $300,000, but due to unforeseen circumstances, the total cost to replace the home is closer to $450,000, your insurance company will pay for the full cost to replace the home.

That’s perfect! Why doesn’t everyone purchase this coverage? Of course, a promise such as this comes with a higher premium. A guaranteed replacement cost policy will cost more than a regular replacement cost policy that is subject to the limitations of the replacement value of the home.

It should also be noted that some insurance companies do not offer guaranteed replacement cost to homes over a certain age, and some insurance companies define guaranteed replacement cost differently. Some insurance companies’ guaranteed replacement cost means the full guarantee as outlined; however, others define guaranteed replacement cost as a guarantee that they will cover rebuild costs of a home over and above the stated replacement value of the home, up to a certain percentage, for example, 120 percent of the replacement cost, meaning you are still subject to limitations.

Calculate Your Home Replacement Cost

Douglas Cost Guide Inc. has made replacement cost calculations worry free. With over 30 years of valuation experience, Douglas Cost Guide has developed and honed the residential cost guide to help homeowners understand the factors considered when calculating replacement cost. Douglas Residential Cost Guide completes the calculation for you using Canadian data, market trends and costing. Utilizing Douglas Residential Cost Guide to calculate your home’s replacement cost can act as a check and balance, giving you a baseline for your home’s replacement cost to ensure your insurance company’s calculations are accurate.

Questions to Ask When Shopping for Home Insurance

It’s imperative when shopping for home insurance to ask questions.

  • How does your insurance company define guaranteed replacement cost?
  • Is guaranteed replacement cost available for your home?
  • What is the premium difference between guaranteed replacement cost and normal replacement cost coverage?
  • Of course, most importantly, what is your home’s replacement cost value?

Let Douglas Cost Guide Inc. help with the big questions so you can breathe easy.  Visit the Douglas Residential Cost Guide today.

What is the Difference Between Replacement Cost and Guaranteed Replacement Cost?

We understand what replacement cost is: the estimated dollar figure required to rebuild your home from the ground up in the event of a total loss. Stands to reason, replacement cost is the cost to replace your home; but what about guaranteed replacement cost? What does that mean? Is there a difference? Which coverage is better? Don’t fret – we’re here to clear up confusion surrounding the difference between guaranteed replacement cost and replacement cost.

What is Replacement Cost?

With replacement cost insurance, your insurance company will pay to repair or replace damaged portions of your home without considering depreciation. If you experience hail damage to your shingles, with replacement cost, the insurance company will not factor in that the shingles are seven years old and not worth as much as new shingles, they will simply replace the damaged shingles with new ones; this is replacement cost. However, the replacement cost is subject to a maximum amount.

For example, if your home’s estimated replacement cost is $250,000 and you experience a total loss, having to rebuild from the ground up, your insurance company will pay to rebuild your house, up to $250,000.

What is Guaranteed Replacement Cost?

What if it costs more than $250,000 to replace my house? What if $250,000 wasn’t estimated properly? Now what? This is where guaranteed replacement cost comes into play.

Guaranteed replacement cost is just that, it’s guaranteed. This means if you experience a total loss and must rebuild, the rebuild is not capped at the total amount of replacement cost, i.e. $250,000.

If your replacement cost is estimated at $250,000 and the rebuild costs $310,000, the total cost of the rebuild will be covered under guaranteed replacement cost coverage. Guaranteed replacement cost coverage guarantees that the insurance company will put you in the exact same position you were in before the loss; this means you can rest assured knowing that the beautiful home you’ve created will be protected and rebuilt, no matter the cost.

What Does Guaranteed Replacement Cost Cover?

That being said, guaranteed replacement cost is put in place for your protection; it ensures your home will be rebuilt without the worry of running out of funds. As with most insurance coverage, guaranteed replacement cost is designed to put you back in the same place you were in prior to the loss. The fact that funds do not cap out is a huge stress reliever. However, if during a rebuild, you decide to make some upgrades to your home, such as:

  • Switching out the Formica countertops for marble, granite or a natural stone
  • Replacing your laminate flooring with new hardwood

Does a Guaranteed Replacement Cost Policy Cover Home Upgrades?

A guaranteed replacement cost policy is a guarantee that the home you had previously will be rebuilt, floors and finishes will be replaced using the same materials that were in place prior to the loss. Should the homeowner decide to make some upgrades during the repair or rebuild as a result of a claim, then typically the homeowner would be responsible for the difference in cost between what was in the residence at the time of the loss and the upgraded material(s) and/or fixture(s). It is for this reason that a dollar figure is still attached to a guaranteed replacement cost policy.

Ensure Guaranteed Replacement Cost is Accurately Calculated

It’s imperative that your home’s replacement cost be accurately calculated. A guaranteed replacement cost policy is designed to ensure your home is rebuilt in the event that something unexpected happens.

  • Perhaps excavation of the old materials from the home is more costly now than it was when your policy was first implemented.
  • Perhaps the price of metal has sky-rocketed over the last three months and your policy has yet to renew and adjust for new the new pricing.

It is for these reasons that guaranteed replacement cost was designed. Coverage to give you peace of mind that no matter what the economic climate, or unforeseen hurdles that may pop up during rebuild, your home will be erected back to its former glory.

Does Guaranteed Replacement Cost Come at an Added Cost?

When shopping for homeowner’s coverage, guaranteed replacement cost sounds like the obvious choice. Of course, as with everything, additional promises come at an additional price.

Depending on the specifications of your home, a guaranteed replacement cost policy can come at a rather large additional premium. Some companies will not offer guaranteed replacement cost for older homes or some state that their guaranteed replacement cost is subject to 120% of the stated replacement cost. It’s important to discuss these details and limits with your agent or broker before deciding which coverage choice is best for your home.

Calculate Your Homes Replacement the Cost with Douglas Cost Guide

To ensure peace of mind, even in the absence of guaranteed replacement cost, it’s imperative that you feel confident that the calculated replacement cost of your home is accurate. The Douglas Residential Cost Guide was designed specifically for this reason. Created by leading industry experts with over 30 years’ experience, the Douglas Residential Cost Guide was designed by Canadians, for Canadian homeowners. Whether you’re hesitant about the current amount of coverage you have in place or are just starting out on your home insurance journey, using the Douglas Residential Cost Guide to calculate your home’s replacement cost will help ensure your home and your family are well protected for years to come.

 

Does Replacement Cost Impact Insurance Premiums?

Replacement cost is the amount of money it would cost to rebuild your home from the ground up in the event of a total loss. Does the cost to rebuild your home impact your insurance premium? Absolutely. The higher the cost to rebuild a home, the larger the risk an insurance company assumes. The larger the risk, the higher the premium.

How Replacement Cost Impacts Insurance Premiums

There are a number of factors used to determine replacement cost; size, age, and finishes to name a few.

Replacement cost for a 1,200 square foot, two-bedroom bungalow built in 1973 may have basic finishes associated with 1970s design and building practices and could have a replacement cost of $350,000.

In comparison, a 3,200 square foot, seven-bedroom home built in 1917 may have historic features and mouldings synonymous with early 1900s architecture that would be costly to replace. The replacement cost for a larger, 3,200 square foot historic home could be upwards of $1,500,000.

Replacement Cost is Calculated and Applied to Your Coverage

Regardless of which coverage option you choose for your homeowner’s policy, actual cash value or replacement cost insurance, a replacement cost for your home is always calculated and used as a baseline for determining other coverages in your policy.

A percentage of your home’s replacement cost is used to determine the amount of coverage for your home’s contents and detached structures. The higher the replacement cost value of your home, the higher the corresponding coverages; thus, increasing the risk assumed by the insurance company.

When calculating home insurance premiums, Canadian insurance companies will examine the potential payout of a claim, as well as the likelihood that a claim will occur.

Additional Factors That May Impact Your Insurance Premium

In addition to replacement cost, factors that affect insurance premiums can include:

  • Claims history of the house itself,
  • Claims history of the homeowner,
  • The specific geographic location of the home,
  • The type of wiring and plumbing,
  • Additional features, such as: fireplaces, porches etc.

All these factors contribute to the potential of a loss and thus impact the premium as well.

In short, the higher the replacement cost of the home, the higher the additional coverages, the higher the associated insurance premium.

Get an Accurate Estimate of Your Replacement Cost

The key to keeping your insurance premiums from inflating is ensuring your replacement cost is accurately calculated. Carefully developed by leading industry professionals, the Douglas Residential Cost Guide will allow you to accurately estimate your replacement cost, allowing you to rest easy knowing your insurance premiums reflect the perfect amount of coverage needed to protect your home and your family, nothing more, nothing less.

Get an accurate estimate of your home’s replacement cost today using the Douglas Residential Cost Guide.

Factors Used to Estimate House Insurance Replacement Cost

What factors are used to estimate house insurance replacement cost? In short, everything. It can seem very overwhelming when considering all factors used to determine the replacement cost of a home or residential property in Canada. For simplicity, we’ll start with the largest factors and work our way down.

Size of The Home

The size of the home is arguably the primary factor in determining replacement cost. The larger the home, the more materials and labour required to rebuild in the event of a loss.

Age of The Property

The age of your home determines its architectural era and helps infer details of its construction. For example, a home built in the early 1900s may feature crown mouldings, large baseboards, and solid hardwood doors; these elements are more costly to replace and thus increase your home’s replacement cost.

Home Finishes

The selected finishes in a home also impact replacement cost. Hardwood floors would be more expensive to replace than laminate. Marble or granite counter tops would cost more to replace than a standard Formica countertop. Specialty features such as pocket or barn doors, tray ceilings or wired-in surround-sound systems would be costly to replace, thus impacting your replacement cost.

Additional Factors

Additional factors that are considered when evaluating the replacement cost of a residential property, include:

  • The number of rooms
  • The type and number of light fixtures
  • The type and number of windows
  • Ceiling heights

These are all factored into replacement cost as well. Logically speaking, a home with 10-foot ceilings would require two additional feet of drywall, insulation and wiring to replace over the standard 8-foot ceiling height. A home that features 16 pot-lights in the living room would require additional costs in materials and labour to replace than it would to replace a single light fixture. The number of rooms in a home requires additional framing and drywall which would impact the replacement cost as well.

Estimate Your Home Rebuild Cost with Douglas Residential Cost Guide

In short, every aspect of your home from shingles to foundation and everything in between is all considered when calculating replacement cost. It can be an overwhelming process. The Douglas Residential Cost Guide makes estimating the replacement cost of your residence easy. Our easy-to-use guide was developed by leading industry professionals utilizing geographic and market trends and pricing to ensure your replacement cost is accurately calculated. Let us help you calculate your replacement cost today.

Benefits of Using Douglas Residential Cost Guide to Determine the Replacement Cost for Residential Occupancies

Your house is not just a place to protect you from the ever-changing elements of Canadian weather patterns, it is where you rest your head at night; a place to keep your children safe; a place to spend lazy Sunday mornings and Christmas dinners; a place to build memories. Your house is a home, a refuge, your own little corner of the world. It is also one of your most important assets. It is for these reasons, and so many others, that it’s imperative that your home’s replacement cost is accurately calculated. Of course, insurance companies have their own replacement cost tools, however, insurance is not the only use for replacement cost, and it can be a little unsettling to trust such an important piece of information to an unknown system. Fear not, Douglas Residential Cost Guide can help.

Developed for Canadian Residential Properties

Douglas Residential Cost Guide has been carefully researched, developed, compiled, and published right here in Canada using only Canadian pricing data. Douglas Cost Guides’ creator, a retired member of the Appraisal Institute of Canada, is a leading expert in appraisal and evaluation with over 30-years’ experience in site inspection, property appraisal/evaluation, and real estate appraisal. The residential cost guide was specifically developed for Canadian’s, utilizing extensive research in Canadian residential construction, market trends, and other industry data to create a cost guide using Canadian data, unique to Canadian property owners.

Trusted by Industry Professionals

It is due to this expertise and extensive research that the Douglas Residential Cost Guide is a recognized and respected costing tool trusted by industry players: banks and financial institutions, corporations, lawyers, accountants, and the Canadian insurance industry all recognizing the Douglas Residential Cost Guide as a trusted, accurate costing tool.

Created by extensive Canadian residential research, the residential cost guide provides costing details for:

  • Bungalows/ 1-storey dwellings
  • Raised ranches/ bi-level-style homes
  • Side splits and backs split residences
  • 1-½, 1-¾ and to 2 story homes
  • Victorian double and triple brick dwellings
  • Fieldstone homes
  • High-value and historic dwellings
  • Semi-detached residences

Assist with Financial Management & Planning

Utilizing the residential costing tool has many great benefits that extend beyond insurance purposes. In addition to helping you ensure your home is properly insured and ample coverage is in place, the residential cost guide can also help with financial management and planning.

Home Renovation

If you’re looking to complete extensive renovations in your home, or construct an addition to your existing residence, utilizing the residential cost guide can help you determine the amount of funding required for your project.

Planning for Property Improvements, Financing & Disputes

The Douglas Residential Cost Guide can help with financial planning and management for larger home projects. The cost guide calculation can also assist in: obtaining financing for projects, settling legal disputes, insurance coverage recommendations, insurance claims settlements, etc.

Accurate Canadian Residential Costing Data

To account for the ever-changing market trends, increasing construction costs, and other additional data that is considered, the residential cost guide is updated as market trends, research and other data indicates, to reflect the most recent and accurate costing details. The cost guide also factors in location adjustments to accommodate different costing and trends in each of the Canadian provinces.

Canada Revenue Agency approved, the Douglas Residential Cost Guide has been carefully crafted with you and your home in mind. It has been developed over the course of many years by Canada’s industry experts and has set the Canadian standard for replacement cost estimations. Douglas Residential Cost Guide was proudly created by Canadian’s, for Canadians. Let us help you care for your most valued asset. With the Douglas Residential Cost Guide, your home is in good hands.

 

Questions to Ask When Shopping for Homeowners Insurance

Congratulations! You’ve just purchased your first home; finally, a place to call your own! This is cause for celebration, and yet you can’t help but think of the thousands of details and responsibilities that come with home ownership. The next step is the daunting and cumbersome task of sourcing home insurance. The hunt for the right homeowner’s insurance doesn’t have to be scary, in fact, armed with the basics, you’ll feel like a pro when shopping for the best coverage for your newest and most important asset.

What Coverage Do I Need?

The biggest question to ask when shopping for insurance is, ‘what coverage do I need’, followed by, ‘how much coverage do I need?’. When dealing with insurance for your home, there are two types of insurance coverage:

  • Actual Cash Value
  • Replacement Cost Insurance

If you’re looking for coverage that will fully protect you and put you in the same position you were in prior to experiencing a loss, replacement cost insurance coverage is what you’ll need.

What is Replacement Cost Coverage?

A common question asked when reviewing home insurance options is, ‘what is replacement cost?’. Replacement cost coverage is the most important coverage you can purchase for your home; it’s the coverage that pays to put you back in the same position you were in prior to experiencing a loss. In short, replacement cost coverage pays to have your house repaired or replaced in the event of a loss. Speaking with your agent about replacement cost coverage is important. Some insurance companies do not offer replacement cost coverage for homes over a certain age. If you have an older home, you’ll want to make sure the companies you approach for quotes offer replacement cost insurance for older homes.

How Do I Know How Much It Costs to Replace My Home?

When discussing replacement cost coverage, this is the biggest concern. Determining how much it would cost to rebuild your home from the ground up seems like an impossible feat. Luckily, insurance companies do not expect you to know the replacement cost of your home; they have special systems/ programs/ tools that will estimate the dollar figure for you. Of course, every company is different, and every system is different.

How do you know which one to choose, how do you know if their estimates are correct? This is where Douglas Residential Cost Guide can help.

The Douglas Residential Cost Guide Can Help

Douglas Residential Cost Guide has been developed by industry experts to help homeowners and insurance industry professionals estimate the replacement cost of your new residence. The residential cost guide is an easy-to-use tool that walks you through a list of questions about your home. All the information gathered is used to estimate the replacement cost of your home. Utilizing the Douglas Residential Cost Guide is an excellent way to assist with acquiring the proper coverage when shopping for a new insurance policy. Check out the Douglas Residential Cost Guide today to estimate the replacement cost of your home.

Once you’ve estimated your home’s replacement cost, you now have a baseline for your insurance policy. When shopping, you can compare the insurance companies’ calculations to yours to ensure you select the right amount of coverage.

What Other Coverages Will I Need?

The estimated replacement cost coverage covers your actual home, but what about your carefully curated belongings? How do you know how much coverage you’ll need for all your stuff? This is another overwhelming thought to ponder. Again, fear not! Coverage for personal belongings, or contents, is called content coverage. Content coverage is calculated as a percentage of your home’s replacement cost. For example, if your home’s replacement cost is $500,000, contents coverage may be calculated using 75 percent of the reconstruction cost, making your contents coverage $375,000.

Will Contents Coverage Cover all My Things?

Insurance policies are contracts between yourself and your insurance provider; as with all contracts, there is fine print to contend with in insurance policies as well. Most policies have specific items listed to state that coverage is available up to a set limit. For example, jewelry may be covered, but only up to $5,000. There may be exclusions for specialty collections or fine arts, or furs may have a limit that will not cover your prized Andy Warhol you plan to hang in the foyer.

Once you know what your contents coverage amount will be, you’ll have to ask what limits are included with the content’s coverage. If you have an extensive jewelry collection, or are a fine art collection, you may need a personal articles policy to cover items over and above the limits stipulated. Personal articles policies will cover your higher-valued items such as jewelry, furs, musical instruments, art, collectibles, tools, home office, specialized computer equipment, et al. You’ll want to ask for a quote on a personal articles policy as well if your collections require coverage over and above the limits.

What About Coverage for My Shed and Garage?

Ensuring your actual house is properly covered is the biggest and most important step, but there are additional things to consider as well. If you have a detached garage, or a storage shed on your new property, you’ll want to ensure these buildings are covered as well. The insurance industry refers to these buildings as detached structures. Coverage for detached structures is also calculated as a percentage of your replacement cost. For example, a company may calculate the cost of any detached structures as 10 percent of your home’s reconstruction cost; therefore, your $500,000 replacement cost allows for $50,000 for detached structures. This might seem a bit excessive for a small storage shed but may not be enough for your detached three-car garage with loft space.

Be sure to provide the insurance companies with all the details of your detached structures as well. If your detached structures include barns, silos, or other farm buildings, utilizing the Douglas Agricultural Cost Guide to calculate the replacement cost of each of your farm buildings is advisable.

Other Points to Consider When Shopping for Homeowners Insurance

Of course, each insurance policy will be as unique as the home you purchased. Here are a few other points to consider:

If You Have a Basement

If you have a basement, you’ll want to ask about sewer back-up coverage for your basement. Sewer back-up coverage will cover damage relating to a sump-pump malfunction, or a drain overflowing, among other things. Each company’s sewer back-up coverage is structured differently. You’ll want to inquire about coverage options available to determine which one is right for you.

Liability Insurance

One final thing to consider is liability coverage. How much liability coverage will you need? There is no easy answer to this question. Liability coverage is very important and will protect you from lawsuits in the event an accident transpires on your property. If you carry a mortgage on your new home, most financial institutions require a minimum of $1 million in liability coverage. It’s best to speak with your mortgage provider and your insurance company to determine what liability coverage is best/ required.

Insurance can seem overwhelming, but is really designed to protect you, your family, and your home. The key to success is to complete your research before you start making calls for quotes. Your starting point should be calculating your home’s replacement cost. As you can see, replacement cost is used to calculate a number of different coverages; as such, it’s important to ensure its calculated effectively.

Visit Douglas Residential Cost Guide to calculate your replacement cost; once you’re armed with your replacement cost figure, everything else will fall into place. Happy shopping!

Benefits of Using Douglas Agricultural Cost Guide to Determine Replacement Cost of Agricultural Buildings

Owning a farm is hard work, it takes dedication, long hours, attention to detail, patience and determination. Farming is the backbone of our country. At Douglas Cost Guides, we not only understand this, we deeply respect and value it. In this blog, we highlight why the Douglas Agricultural Cost Guide is considered the tool of choice for industry professionals when it comes to estimating the replacement cost of Canadian agricultural buildings.

Developed Specifically for Canadian Farms

Douglas Agricultural Cost Guide’s creator, a designated retired member of the Appraisal Institute of Canada, was a leading expert in appraisal and evaluation, with over 30 years of experience in land value analysis, site inspection, agricultural property appraisal and evaluation, and real estate fee appraisal. The Douglas Agricultural Cost Guide was specifically developed for the valuation of Canadian agricultural structures, utilizing extensive research in Canadian agricultural construction, agricultural occupancy estimates and other industry data to create a cost guide using Canadian data, for valuation and analysis purposes. Determining a price for agricultural buildings can be very challenging, yet a very necessary task for farmers and others connected to the valuation of farm properties and / or structures. Replacement costs for buildings is needed for many reasons: to ensure proper insurance coverage, budgeting, financial management, taxes, et al.

Unique to Farming & Agriculture Buildings

Many insurance companies have replacement cost tools that are used to help determine replacement cost; however, many of those systems were developed for residential buildings and slightly modified to try an accommodate agricultural buildings. Douglas Agricultural Cost Guide was developed specifically for the valuation of agricultural buildings.

With extensive research, the agricultural guide provides costing details for:

  • Commodity/ Produce
  • Feed Storage
  • Barns
  • Livestock Facilities
  • Manure Storage
  • Machinery Storage
  • Greenhouses

Accurate and Up-to-Date Costing Data

With on-going research and adjustments, the agricultural cost guide is updated and published annually to ensure all costing and data captured is current. Users can access the easy-to-use guide to determine the reconstruction cost of their agricultural buildings at any time, for any purpose.

Our cost guide has been recognized as the industry standard by Canadian insurance companies, adjusting firms, banks and other financial institutions, law practices, and accountants. Insurance industry and Canada Revenue Agency approved; the agricultural cost guide is a highly trusted tool developed specifically for you to determine the replacement cost of your agricultural buildings.

As Canadians, we rely on our farmers and value their expertise. In turn, farmers and agricultural industry partners can take comfort in knowing they can rely on us because of our expertise. Use Douglas Agricultural Cost Guide today to help you determine the replacement cost of your most valued assets.