With Orange County real estate hitting new highs in 2026, many homeowners are making a dangerous mistake: insuring their home for what they paid for it, rather than what it costs to rebuild it.
Market Value vs. Replacement Cost
- Market Value: This is what a buyer would pay for your home and land today.
- Replacement Cost: This is the actual cost of labor and materials to rebuild your structure from the ground up if a disaster strikes.
In cities like Irvine, the cost of construction materials and specialized labor has surged. If your policy hasn’t been updated since 2023 or 2024, you likely have a “coverage gap” that could cost you hundreds of thousands of dollars in a total loss.
Three Things to Check on Your Policy Today:
- Extended Replacement Cost: Does your policy offer a buffer (usually 25% or 50%) to cover sudden surges in construction costs?
- Ordinance or Law Coverage: If your older home in Westminster needs to be rebuilt to 2026 building codes, will your insurance pay for those mandatory upgrades?
- Inflation Guard: Ensure your policy automatically adjusts your dwelling limits annually to keep pace with California’s rising costs.
Why Starwest Insurance?
Since 1995, we have helped Orange County families navigate the complexities of the California insurance market. As an independent agency, we shop multiple carriers to ensure you aren’t just getting the “cheapest” rate, but the proper coverage for your biggest asset.