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Wednesday 15 July 2020

This is a Disaster! Or is it?

Posted by at 3:35 AM

Property damage from water, fire, mold, and storms can feel devastating.  There’s a reason they’re called disasters, right?  But did you know that your disaster can actually give your property value a boost in the long run if you have the right homeowner’s coverage and restoration professional working on the job?  When you have a homeowner’s claim on your home, your contractor’s job is to get the home back to pre-loss condition, oftentimes, though, it turns out better, particularly if you live in an older home

Proper Restoration

When you experience any kind of damage to your home, it’s extremely important to have the damage inspected by a professional restoration company.  Proper restoration is the key to not only maintaining the value of your home, but potentially increasing its value.  If damage is left to sit or is improperly restored and repaired, you run the risk of further and worse damage in the long run. 

Pre-Loss Condition

Pre-loss condition is an important insurance term and concept.  The meaning is fairly straightforward: the condition that your property was in the moment before a damage occurred.  Assuming that your loss is fully covered under your policy, your insurance will pay to put your property back to its pre-loss condition with your deductible being your only out of pocket cost.  In addition to pre-loss condition, you may run across terms like “comparable materials and quality” when you’re handling your damage with your insurance company.  This means that any unsalvageable materials from the damage will be replaced with the same material or a similar material of equal quality.  For example, if you have laminate flooring in your kitchen that gets destroyed, it will be replaced with laminate flooring of equal quality even if the exact same flooring is no longer available.  In a home that’s only a few years old, you probably won’t gain much value from this kind of exchange.  What about when your home is decades old?  Your misfortune of dealing with a damage to your property may have just become a boon of replacing your 40-year-old kitchen cabinets with brand new ones.  Even if the cabinets aren’t expensive or super high quality, they’re still new which makes them worth more. 

Choosing to Upgrade

One thing a lot of homeowners aren’t aware they can do in the event of an insurance claim is choose to make upgrades.  That kitchen remodel you were thinking of doing, but hadn’t saved all the money for yet?  You might be able to afford it, now.  This is the point where you can really turn your damage to your benefit.  Your insurance company will still only pay for the comparable materials and quality that were previously in your home less your deductible, but they certainly will not complain if you choose to spend extra money out of your pocket and upgrade those materials.  This just means they’re now insuring a higher quality home, which is a good thing in their books.  Going back to the example of your kitchen, perhaps your old cabinets and laminate counter were ruined by a water damage.  Your insurance will give you the money for those same quality cabinets and counter, but you’ve already been considering a kitchen remodel and saving for it.  You can now combine the money you’ve saved and the money the insurance is paying to upgrade to much higher quality materials for a much lower out of pocket cost.  This can vastly improve your property value, especially when you’re looking at areas of the home like the kitchen and bathroom that can be costly to remodel but also add huge value to a property when they have those higher quality materials. 

Damage to your home is undoubtedly stressful.  It can be confusing and time consuming, but it can also be a benefit to your property in the long run with the right insurance coverage and a quality restoration and reconstruction company at your back.