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Luxury Home With A PoolIn the event of a total fire loss, the recovery process can be incredibly overwhelming and emotional. If you own a luxury home, there are things you can do today to make sure you've set yourself up for success in the event of a fire loss.

How to Make Sure You Can Rebuild

Luxury homes are very expensive to rebuild, and it takes a substantial amount of time to do so. To determine how much it will cost to rebuild your home, consider these tips:

  • Speak to Your Insurance Agent. Talk to an expert! Supply and demand has a large impact on what it costs to buy, sell, build, and rebuild a home. Your agent should be a trusted resource to help determine if your home is insured correctly.
  • Talk to Your Builder. A reputable builder should be able to explain the going rate for new construction vs reconstruction costs. Remember, the cost to rebuild is not the same as the cost new. They can also help you set expectations on how long it will take to rebuild, and how to work with the city and local authorities on what needs to be done to start a rebuild.

Important Coverages To Ask For

  • Guaranteed Replacement Cost (GRC): Make sure your insurance policy offers Guaranteed Home Replacement. This coverage will guarantee that you can receive the full amount to rebuild the home. It will cover you even if the damages exceeds the policy limits with no cap. Some home policies cap the amount they will pay for a replacement plan. For example, some will only offer 20 percent above the dwelling limit listed. This is not the same as Guaranteed Dwelling Replacement. It is worth noting, some of the most known companies do not offer GRC. In fact, State Farm, Allstate, Liberty Mutual, and Farm Bureau do not offer GRC.
  • Loss of Use: This provides coverage for you to live somewhere else while your home is being repaired or rebuilt. There are several ways we see this coverage offered: Time Cap with Dollar Cap, Time Cap with no Dollar Cap, and No Dollar or Time Cap. For a high value or luxury home, we would encourage you to have Unlimited Time and Dollar, if available. If that is not available, seek out a policy that offers 24 months Loss of Use with no dollar cap.
  • Walk Away Coverage: Some companies will cut you a check for the damages to your home up to the dollar limit of your policy, should you choose not to rebuild. For some, it's simpler to just take the money, pay off any mortgage, and buy a new home elsewhere.
Bottom Line: There are many things to consider when insuring your luxury home. Don't let just anyone offer you coverage. Insure it with an agent who has the resources to give you the protection you need.

We've got you covered. Raymond Preston & Reed, LLC can help you get the right coverage for your luxury home. Call us at (615) 866-2728 or contact us online for more information.
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Phone: 615.866.2728
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