When people in Reading, PA, secure a mortgage, the lender typically requires them to take out insurance on the loan, rather than the structure itself. What homeowners sometimes do not realize is that insuring their home for fair market value does not necessarily mean they are covered to rebuild. At Berks County Insurance, we work diligently with property owners to ensure they are truly protected in the event of a catastrophe.

What is Market Value?

When you buy a house, you typically pay around market value. You may have to pay a premium or get a deal, depending on the state of the real estate landscape. Market value is an estimate of what your house and land could fetch from buyers at any given time. This figure fluctuates based on supply and demand, location, and other factors.

What is Rebuilding Cost?

The cost of rebuilding a house in Reading, PA, has very little to do with how much buyers would be willing to pay. Instead, reconstruction costs are determined by the price of materials, labor, permits, architectural blueprints, as well as razing and removing any debris from a fire or severe weather event. Like market value, these costs also fluctuate based on inflation, supply, access to labor, and other factors.

If you visit big box outlets that sell lumber, fixtures, and other materials, you may have noticed that the prices have risen in recent years. That means the cost of replacing a house has also increased.

Get Complete Home Rebuilding Insurance Coverage in Reading

Homeowners must speak to an insurance professional and calculate the replacement costs annually. Update your homeowners’ insurance policy to reflect the rising costs. Otherwise, you could find yourself out of pocket if a catastrophe strikes. We encourage Reading, PA, homeowners to contact one of our experts at Berks County Insurance today.