Source: Windermere Blog

In addition to providing shelter and comfort, our home is often our single greatest asset. And it’s important that we protect that precious investment. Most homeowners realize the importance of homeowners insurance in safeguarding the value of a home. However, what they may not know is that about two-thirds of all homeowners are under-insured. According to a national survey, the average homeowner has enough insurance to rebuild only about 80% of his or her house.

What a standard homeowners policy covers

A standard homeowner’s insurance policy typically covers your home, your belongings, injury or property damage to others, and living expenses if you are unable to live in your home temporarily because of an insured disaster.

The policy likely pays to repair or rebuild your home if it is damaged or destroyed by disasters, such as fire or lighting. Your belongings, such as furniture and clothing, are also insured against these types of disasters, as well as theft. Some risks, such as flooding or acts of war, are routinely excluded from homeowner policies.

Other coverage in a standard homeowner’s policy typically includes the legal costs for injury or property damage that you or family members, including your pets, cause to other people. For example, if someone is injured on your property and decides to sue, the insurance would cover the cost of defending you in court and any damages you may have to pay. Policies also provide medical coverage in the event someone other than your family is injured in your home.

If your home is seriously damaged and needs to be rebuilt, a standard policy will usually cover hotel bills, restaurant meals and other living expenses incurred while you are temporarily relocated.

How much insurance do you need?

Homeowners should review their policy each year to make sure they have sufficient coverage for their home. The three questions to ask yourself are:

·      Do I have enough insurance to protect my assets?

·      Do I have enough insurance to rebuild my home?

·      Do I have enough insurance to replace all my possessions?

Here’s some more information that will help you determine how much insurance is enough to meet your needs and ensure that your home will be sufficiently protected.

Protect your assets

Make sure you have enough liability insurance to protect your assets in case of a lawsuit due to injury or property damage. Most homeowner’s insurance policies provide a minimum of $100,000 worth of liability coverage. With the increasingly higher costs of litigation and monetary compensation, many homeowners now purchase $300,000 or more in liability protection. If that sounds like a lot, consider that the average dog bite claim is about $20,000. Talk with your insurance agent about the best coverage for your situation.

Rebuild your home

You need enough insurance to finance the cost of rebuilding your home at current construction costs, which vary by area. Don’t confuse the amount of coverage you need with the market value of your home. You’re not insuring the land your home is built on, which makes up a significant portion of the overall value of your property. In pricey markets such as San Francisco, land costs account for over 75 percent of a home’s value.

The average policy is designed to cover the cost of rebuilding your home using today’s standard building materials and techniques. If you have an unusual, historical or custom-built home, you may want to contact a specialty insurer to ensure that you have sufficient coverage to replicate any special architectural elements. Those with older homes should consider additions to the policy that pay the cost of rebuilding their home to meet new building codes.

Finally, if you’ve done any recent remodeling, make sure your insurance reflects the increased value of your home.

Remember that a standard policy does not pay for damage caused by a flood or earthquake. Special coverage is needed to protect against these incidents. Your insurance company can let you know if your area is flood or earthquake prone. The cost of coverage depends on your home’s location and corresponding risk.

Replacing your valuables

If something happens to your home, chances are the things inside will be damaged or destroyed as well. Your coverage depends on the type of policy you have. A cost value policy pays the cost to replace your belongings minus depreciation. A replacement cost policy reimburses you for the cost to replace the item.

There are limits on the losses that can be claimed for expensive items, such as artwork, jewelry, and collectables. You can get additional coverage for these types of items by purchasing supplemental premiums.

To determine if you have enough insurance, you need to have a good handle on the value of your personal items. Create a detailed home inventory file that keeps track of the items in your home and the cost to replace them.

Create a home inventory file

It takes time to inventory your possessions, but it’s time well spent. The little bit of extra preparation can also keep your mind at ease.  The best method for creating a home inventory list is to go through each room of your home and individually record the items of significant value.  Simple inventory lists are available online.  You can also sweep through each room with a video or digital camera and document each of your belongings. Your home inventory file should include the following items:

·      Item description and quantity

·      Manufacturer or brand name

·      Serial number or model number

·      Where the item was purchased

·      Receipt or other proof of purchase \Photocopies of any appraisals, along with the name and address of the appraiser

·      Date of purchase (or age)

·      Current value

·      Replacement cost

Pay special attention to highly valuable items such as electronics, artwork, jewelry, and collectibles.

Storing your home inventory list

Make sure your inventory list and images will be safe incase your home is damaged or destroyed. Store them in a safe deposit box, at the home of a friend or relative, or on an online Web storage site. Some insurance companies provide online storage for digital files. (Storing them on your home computer does you no good if your computer is stolen or damaged). Once you have an inventory file set up, be sure to update it as you make new purchases.

We invest a lot in our homes, so it’s important we take the necessary measures to safeguard it against financial and emotional loss in the wake of a disaster.

Source: www.blog.windermere.com

Some good friends of ours just finished a master suite remodel. On the whole it went well: on time, on budget and generally to their satisfaction. Still, the process and execution were less than flawless, and as I listened to what didn’t go exactly to plan, I realized that other people could benefit from considering many of the lessons my friends learned before they embark on their own projects.

Bathroom Remodel 1: Tucker & Marks, original photo on Houzz

1. Have a plan. This is not just an idea in your head and some hand waving or rough sketches. A plan is dimensioned and intentional, and includes elevations showing what rooms look like from different directions. Plans are most frequently and effectively assembled by design professionals who know the amount of space required for common features in rooms, like showers and vanities, and are accustomed to working out solutions for challenging spaces.

The purpose of a plan is twofold: to show homeowners what they should expect, and to show contractors what they are expected to build. Without a plan, you have only hand waving, and that’s not much on which to base a contract, or from which to build.

Having a plan also enables homeowners to interview a short list of contractors and to evaluate their thoughts on the likely cost. Without a plan, every contractor you talk with will have a slightly different idea of what you have in mind.

Hire a design professional to create this plan. Design professionals do this all day, every day, and will put together a functional plan that 99.9 percent of the time will be better than anything you could come up with yourself. It will also have some beautiful feature or function that you never would have thought of (or would have thought impossible). Spend the money. It’s worth it. If you’re not convinced, talk with a friend or two who decided to forgo professional design and see how their project turned out.

Bathroom Remodel 2: Susan Lachance Interior Design, original photo on Houzz

2. Specify materials. A corollary to plans is specifications. This list of materials and methods outlines what will be installed and in what way. Specifications provide the opportunity to outline everything that will be installed and mention things like where seams will be in countertops and how many seams are acceptable. These kinds of things can have a large bearing on cost, so documenting what you expect will help contractors provide pricing for the specific things you want.

Think about cars as a comparison. Do you just ask for a 14-foot-long black car with a 6-cylinder engine? That could be a lot of different cars at different price points. Think about the kinds of details you’d consider for ordering a car, and make sure you ask for all of the features you’d like in your project, or you might end up with a base-model bath or kitchen.

As in item No. 1, hire a professional to do this. It will be money well spent.

Bathroom Remodel 3: Sutro Architects, original photo on Houzz

3. Don’t be frightened. The dollar amount you will spend on your remodel can be high, particularly if the plan for the project you really want costs twice what you thought it would. It’s not unusual for homeowners to start with a wish list and then make decisions to bring the scope of work for their project back in line with their budget. Expect this to be part of the process.

The first step of budgeting for a project is to talk with your design professional about how much you are willing to spend. Make sure you account for at least a 10 percent contingency amount in that so you are aiming for a realistic number. When the first round of pricing comes back from contractors and it’s higher than your budget, it’s probably because it includes your entire wish list.

This is when value engineering (VE) comes in. When you value engineer a project, you identify parts of the scope of work (either the materials or the size of the project) that can be deleted or substituted. In most projects there’s a decent list of items that will reduce costs and allow you to bring the project into the range of your budget.

Working with design professionals through this process will allow you to benefit from their expertise and delete or change items that won’t substantially affect the finished project.

Related: See How Much a Bathroom Remodel Will Cost You

Bathroom Remodel 4: FINNE Architects, original photo on Houzz

4. See the value of CA. CA is not California. It’s construction administration, and it’s one of the key services that architects offer their clients.

When the construction set of plans is done, the elevations and electrical plans are complete, and the project is ready to start, it is not time to bid your architect adieu. Construction administration keeps architects on through construction, usually attending weekly meetings and providing design details as needed, assisting with electrical and tile layout, and providing feedback to the contractor as they build.

Architects also provide clients with an objective and experienced eye as construction proceeds. They can scan the room and notice whether framing is installed as they designed it and whether the materials they specified are being used — particularly on the components of the house that are inside walls.

I can unequivocally say that the projects we work on where CA is part of the project go more smoothly and have more consistently excellent outcomes, because of the collaboration that is built into the process. Would you rather have your contractor work out design details, or the architect to whom you entrusted the design of your project? Let all the professionals do their jobs, and keep your team together during construction.

Bathroom Remodel 5: Dick Clark + Associates, original photo on Houzz

5. Ask how and why. If you aren’t entirely certain about how something is done or why it’s being done, ask. Construction professionals’ work is usually routine and expected. Because of that, tradespeople sometimes will install things a certain way because it’s the simplest and easiest way to do it. But sometimes the path of least resistance won’t yield the result you want.

Why does that ductwork need to go there? Probably it doesn’t. It can go in one or two other places, and having a conversation about where it will go can make a big difference in your finished space. The same thing with plumbing lines and other infrastructure.

In residential jobs, plumbing, electrical and HVAC work is almost always bidder-designed, meaning that your construction plans won’t give instructions about how to get utilities to their locations — it will just show where they need to end up. That means a deliberate discussion is needed. If you don’t ask, and your contractor is not proactive, don’t be surprised to see ductwork or plumbing in places you don’t want it.

Bathroom Remodel 6: Sketch Building Design, original photo on Houzz

6. Ask how long and how much. When changes are made during construction — and they inevitably will be — don’t just ask whether a change can be made, but know the cost and the impact on schedule. Change orders are supposed to detail the change made and all of its effects, but sometimes they don’t capture everything. For instance, you might like to add an outlet to an existing wall. There’s the obvious cost of the electrician, but what about the demolition where the outlet will go, patching the Sheetrock and repainting the wall at that location? Oh, and protecting the floor while the work is going on. It never hurts to ask, “Is this really all of it?”

One other thing to make sure you ask with change orders is whether the decision you’re making affects anything else. An example might be changing the size of a vanity sink base from standard to custom. There’s an obvious change in cost for the cabinet, and perhaps an adjustment to the countertop cost if the size of the cabinet makes it larger or smaller, but did you think about the sink and faucet you selected months ago for the standard cabinet? Changes to casework almost always have a cascade of effects, from countertops to tile to millwork, and can necessitate revisiting sinks and faucets to make sure they still fit.

By Anne Higuera CGR, CAPS, Houzz