Over the past five weeks, I’ve written about home insurance topics related to the tornadoes that hit north Texas on December 26th including picking the right roofer or contractor, claim steps, important coverage in the event of a total loss, how claims are paid and why a home inventory is invaluable after a major claim. I felt it appropriate to end this series with a look at two things home insurance covers which are factored into the home’s dwelling value that most homeowners don’t think about, demolition and debris removal.
Every home insurance policy I write is a replacement cost policy. In order to determine the home’s replacement cost value, I gather information from the owner or buyer, and other sources. The information includes the number of bedrooms, bathrooms, type of floor coverings, roof type, etc. This information is entered into each company’s replacement cost system generating the amount of money it will take to replace a home due to a total loss.
Many people assume when a home is totaled, or considered a total loss, none of the structure remains on top of the foundation. This is hardly the norm; in many cases, a wall or part of the structure remains. It’s pretty common for even the remaining portion to be considered unsafe, and is therefore torn down or demolished. After demolition, the debris must be hauled to the city or county dump.
Both the demolition and debris removal have costs associated with them. I talked with Johann Ferguson owner of Junk King in Dallas to review what may have changed cost wise on both these items since we last talked. Junk King provides a variety of services including hauling away almost anything that a homeowner may need taken to the dump. They also will demo a kitchen or bath for someone’s home remodeling project and even demo an entire house for a tear down rebuild project.
There are several factors which determine the cost of demolition and debris removal including:
- The home’s square footage
- Foundation type (slab or pier and beam)
- Does the slab need to be removed
- Presence of a basement
- Siding type (wood frame, brick, stucco, etc.)
- Number of stories
- Do the driveway and sidewalk need to be removed
- Presence of a pool or trees and whether they need to be removed
Where the home is located also impacts this cost as different municipalities in the Dallas / Fort Worth area charge different rates for home debris. For example, Dallas charges $21 a ton while Garland charges $47 a ton. In addition, rates may vary for homes in areas such as the Park Cities, Willow Bend, Southlake, Colleyville, etc.
The demolition cost for a home Junk King recently tore down ran about $5.00 a square foot. Rates range from $4 to $10 a square foot based on the above mentioned factors for demolition and debris removal. The most expensive home demolition I’ve seen in the past 5 years came in at $35,000 for a home which was ravaged by a home fire and determined to be a total loss.
Properly insuring a home is important, and having enough coverage (not too much or too little) to cover demolition and debris removal in addition to rebuilding is where it starts. In the Dallas / Fort Worth area most home insurance companies believe it takes between $100 and $115 a square foot minimum to cover this. To find out if you have enough, divide the amount of coverage you have on your home by the number of square feet your home has. If it’s less than $100, you are probably don’t have enough coverage to cover a total loss.
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