The cost of reconstruction can greatly impact your resulting settlement when you file a property damage insurance claim. Insurers will take the total cost and use it to calculate how much you qualify for, and that’s what ultimately determines the amount that they will offer you. Find out what factors into your property’s reconstruction cost so you can know if you’re getting the right amount when you file a claim!

Think your insurance provider is holding back on relief funds? Reach out to Altieri Insurance Consultants Palm Beach today to get what you are owed. We’re the partner property owners rely on.

The Difference Between Reconstruction and Replacement

If you’re lucky, you’ll just need to replace a few things around the property. You could need funds to swap out a fridge that shorted out during a flood, or a garage door that cracked during a passing hurricane. If you’re not so lucky, your entire property will need to undergo some serious renovations that will require complex construction. Reconstruction costs are much higher than the cost of replacements which means that insurance premiums can grow in response.

Aside from expecting an increase in premiums, property owners should also understand what contributes to the high cost of reconstruction:

1. The Cost of Materials and Labor

Building materials aren’t cheap. The wood that makes up the walls, the steel used for the building’s frame, and even the concrete that sets the foundation all come at a high price, not to mention the cost of demolitions and labor. Even after all of the contractors and construction works complete the reconstruction of your property, there are additional steps to take to ensure your safety like testing the wiring and cleaning up any leftover debris. Every single penny spent on all of these building materials and hours of labor is considered when your insurance provider makes an offer following your claim.

2. The Rising Price of These Assets

Inflation is everyone’s worst enemy. Insurers and policyholders alike have to keep the rising cost of everything in mind when finding a fair value for the cost of reconstruction. This goes beyond expenses for materials and labor. These price spikes can also increase interest rates, create disruptions in manufacturing, cause labor shortages, impact energy usage, and so much more. This issue runs deeper than you can imagine, and it can all affect what you pay for insurance and what you get back when you file a claim.

3. Florida-Specific Obstacles

Being a property owner in Florida comes with its own fair share of troubles. Living in such a disaster-prone state is reason enough to hike insurance rates and cut into your settlement because if one policyholder files a claim, there’s a good chance that a lot of others are around the same time. Collective risk of a hurricane prone areas drive up everyone’s premiums. Additionally, with many older buildings, the cost to make repairs and the increased cost to become compliant with modern building codes, adds to the total potential reconstruction costs. It’s also very likely that your property is made with reinforced materials in response to Florida’s tendency for seasonal natural disasters, in which case, that added cost will also influence your property insurance.

Is Your Insurer Playing Fair? Hire Altieri Insurance Consultants For Expert Intervention

For expert assistance in navigating your insurance policy and the factors that affect your settlement, reach out to Altieri Insurance Consultants Palm Beach at 866-630-0081 for a team of public adjusters who will help you get your life back after property damage. We go over every aspect of your property insurance with comprehensive services like policy reviews, pre-loss planning, and more.