Scott: Today we have another interview and today’s guest is Ed Falkenstein with Gibraltar Insurance Services. Ed why don’t you tell us something that we might not know about insurance.
Ed: One of the biggest things that I usually get questions about when we do insurance quotes is why does my insurance cost so much and why is the replacement cost of the dwelling coverage so much higher than the purchase price? The reason for this is called replacement cost versus the actual cash value. Actual cash value is not necessarily the best thing in mind when you have a loss because if you insure on actual cash value you are not going to get full replacement cost and you therefore will not get 100% of your home rebuilt. What you get is a settlement and not a good thing when it comes to clients claims process, therefore that is why an A plus rated carrier always insures on full replacement cost to protect you, the insured from that total loss
Scott: Okay, so if your house wasn’t built yesterday then what do you want your home insurance to be based on?
Ed: to have it based on the full replacement cost including inflation and cost to build, in other words if you are going to be in the house for 10 to 15 years from now and if you have a total loss, you will want 100% of your house rebuilt, not 75 or 80 per-cent.
Scott: Thank you Ed, that’s some great information. Our Guest today was Ed Falkenstein with Gibraltar Insurance Service. If you have questions about insurance you can email ED at Ed.firstname.lastname@example.org. You can also email me at Scott@ScottCulberson.com and I’ll make sure Ed gets back with you.
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Scott Culberson Broker Associate, Better Homes and Gardens Real Estate Gary Greene.