Ever wonder what goes into calculating the replacement cost of a high value home? Here is how Chubb explains the process:
Establishing the value of the home
Making certain that a home is adequately insured for the full cost of reconstruction is one of the underlying tenets of Chubb's commitment to each insured. Each year, Chubb undertakes a rigorous process to ensure their estimiated reconstruction costs are in line with current construction pricing, including:
- Analyzing residential construction cost data from over 2,000 data points in 731 locations across the US, tracking residential construction cost trends from 26 material and 13 labor inputs;
- Reviewing cost trends for key construction components using national data from the Bureau of Labor Statistics, RSMeans and Marshall & Swift/Boeckh;
- Conducting interviews with local high value home builders;
- Engaging their Claims department to make sure they establish replacement costs that are in sync with the types of claims they typically pay after a loss.
What goes into calculating replacement costs?
Many factors must be considered when rebuilding, such as:
- Materials and Labor Costs - Prices of building materials and construction labor continue to rise. In the last 12 months, the cost of items such as concrete, custom cabinetry, windows & doors, light fixtures and wood siding have risen between 2 and 4 percent. Labor has gone up approximately 3 percent.
- Quality - Chubb hires skilled craftspeople who will restore your insured's home with the same quality materials and detailed work as before the loss.
- Speed - Chubb's goal is to get you back into your home as quickly as possible, so they often pay a premium price for contractors.
What does this mean to your insured?
Given all of this, it is important to be sure that your client's home is insured to its full replacement value. If you're concerned that a home may be underinsured, please contact us to arrange a new Chubb appraisal. Remember to review coverage with your insureds at least once a year. Even a small renovation could potentially render the amount of coverage too low.
Do your customers work out of their home? Maybe they are an accountant, baker, tailor, photographer, tutor, the list goes on. Coverage is available to many classes of home based businesses.
Why Coverage is Necessary:
You operate a small-ebay business and have an inventory of $7,500. A fire in your home destroys or damages your inventory. The Home Based Business policy will provide coverage up to your Business Personal Property limit.
A customer visited an insured's computer repair business operating out of their home. The customer slipped and fell, causing a fractured ankle that requred surgery. Since the customer was at the home for business purposes, the Home Based Business policy provided the liability protection for this claim, valued in excess of $100,000.
A power surge caused electrical damage to the insured's home bakery refrigeration system. The system failed, which resulted in food spoilage, repairs to the refrigerator as well as four days of lost income. The insured's policy provided the equipment breakdown and business income coverage needed.
Let us know if you need assistance writing this coverage. We are always here to help!
In a few short weeks we will be golfing at the Grand General Charity Worm Burner. It's not too late to register and support a great charity. This year's beneficiary is H.U.G.S. Ranch. Click here to visit their website.
On September 20th you can golf with us at Briarwood Golf Course, choose to golf 18-holes with a shotgun start at 10:30am or choose to golf 27-holes with a shotgun start at 8:30am, each option is $79. With your registration fee you will get a cart, lunch, raffle tickets, snacks, a gift bag, beverages, course games and dinner.
If you can't make it to Briarwood you can "Golf Where You Are." With this option you can golf your favorite course, mini-golf, Frisbee golf and even foot golf. The registration fee for this is $25 (you pay your green fee). With your registration fee you get a cool t-shirt, swag and prizes in the mail. When you send in your score card, you will be entered into a special raffle.
The choice is yours! Help us raise money for a great charity. Click Here for the registration form.
Someone should do something to help. Someone is!
That's why we are supporting HUGS Ranch with this year's Worm Burner Golf Outing. Last summer over 300 children and teens came to the ranch. Each was teamed with a mentor, a wrangler, and (their favorite part!) a donated or rescued horse.
Six years ago when I started volunteering at the ranch, most riders had physical challenges. There has been a shift. The majority now are kids who battle depression, anxiety, bi-polar, abuse, homelessness, the heartache of loss, and more.
There is no cost for this equine therapy. We feel the parents already have enough extra expenses with counselors, doctors appointments, and medication. The riders, however, each do a small chore to "earn" their ride. They sweep, clean a stall, wash buckets, pull weeds, or whatever else they can.
Here's what I've seen.
- A child whispers her deepest secrets to Classie, who responds with a nuzzle and a whinny.
- A mom snaps the only photo of her child smiling. He smiles because he's on his favoirte horse, Shadow.
- A child's behavior at school and at home improves so much that the teacher asks what changed.
- A shy child smiles big and tips his hat to a group of parents as he walks by on his last day of sessions.
- Prince, the pony, wears a rider's cowboy hat because the rider has to wear a helmet.
- A tiny child leads 1100 lb. Sonny around the arena, building the child's self-confidence.
- A rider has her hands over her head, making a "V" for Victory!
- A rescued ponly, Tiny, has scars on his face and a bullied child no longer feels alone.
- An underweight rescued horse, Bayleigh, and a girl with anorexria work together to become healthy again, and together they succeed.
This really works. It changes lives for the better. I've seen it happen at HUGS Ranch in an old barn staffed by volunteers and funded by donations.
If you don't golf, or can't make it on September 20th, please consider participating in the Golf-Where-You-Are option and get the shirt. If you mini-golf or Frisbee golf, you can send in your score for a special drawing. Click Here to see how to sign up.
Hay doesn't grow on trees! We appreciate your help!
This article was written by Susan Salzwedel, she's in our marketing departement. Call her if you have questions about HUGS Ranch, she's a volunteer there.