Reviewing Your Homeowners Insurance Policy
According to a study by Marshall & Swift/Boeckh, two out of three homes in the Unites States are underinsured. Here's why:
Construction costs are rising at about 3% per year. Even if you made no improvements (but still maintained the home), a home that cost $250,000 to replace in 2003 would cost about $290,000 to replace in 2008. Additionally, home improvements and renovations drive up the replacement cost of your home. It is estimated that 75% of homeowners do not update their homeowners insurance policy following a home improvement or renovation. Some improvements that may significantly increase your home's replacement cost include decks and patios, kitchen or bathroom remodeling, finishing a basement, and building an addition.
Finally, today's typical insurance plan covers less than it did in the past. Yesterday's policies would guarantee replacement cost coverage. Today, coverage is usually capped at 120-125% of the insured value of your home.
Here are a couple of additional resources:
Wikipedia entry for home insurance- covers the common types of homeowners insurance policies
MSN Money article: Why 2 out of 3 homes are underinsured
The MSN Money article suggests taking the following steps to tell if you have enough coverage:
- Read your policy
- Insure the house, not the land or the mortgage
- Use averages as a starting point- you can start with an average of $75-$85 per square foot and make adjustments from there.
- Talk to builders in your area to get a good estimate based on local market conditions. As an alternative, you can hire an appraiser.
- Consider adding upgrade coverage
Do I Need a Mitre Saw?
We've gone through the basic hand tools that you'll want as part of your toolkit. However, a DIY home improvement person will outgrow the basic toolkit and require some additional tools- tools with more muscle. For a very basic wood molding project, you may be able to get by with a hand saw and a mitre box. This will allow you to, fairly accurately, cut a few angles. The hand saw and mitre box may cost $30-$40. But you will run out of steam very quickly. The alternative is to invest in a powered mitre saw, which will enable you make accurate cuts very quickly. The downside- it costs more, requires some storage, and is loud. However, I believe that it is one of the most useful power tools for home improvement projects. In addition to mitring and beveling angled cuts, a mitre saw can be used to make straight crosscuts in any piece of wood (there is a size constraint that is determined by the blade diameter on the saw). Maybe you can even mitre a sushi roll or a sausage- but I've never tried it.
For my first wood molding project, I purchased a Ryobi 10" compound mitre saw from Home Depot for $99. It has worked perfectly since day one. I really don't think that you need anything fancy unless you are making furniture for a living. When I bought the saw, my strategy was to learn on an inexpensive saw and then purchase something much nicer. However, there is no reason to buy something more expensive. The $99 saw does the job.
If you have a mitre saw and a table saw (more on table saws in another post), you probably don't need a circular saw because all your wood can be cut with the mitre and table saws.
My mitre saw included a sawdust bag that attaches to the exhaust. However, the saw still makes quite a mess. So make sure that you are using it in an appropriate area such as a garage or even outside. I didn't spring for a matching stand. I simply clamped the saw to a workbench.Jon
The Basic Toolkit - Miscellaneous Items
This is the final post in the series discussing the basic toolkit. Here are the items that have been covered thus far:
In addition to the items above, my basic toolkit contains several other items:
-Torpedo level- for most DIY woodworking projects, I prefer a 24" level. However, sometimes you just need something small for a quick check of something. I have a laser level, but it gathers dust as I found that I prefer a standard level.
-Pencil- A necessity for marking measurements and general note-taking
-Box Cutter- for the ultimate in cutting, go with the fixed-blade variety. However, a retractable blade may be more appropriate for safety reasons.
-Hook Knife- This knife looks a little like a miniature sickle. It's useful for cutting carpet, but I use it for dozens of other things too.
-Nail Sets- When I install molding, I use a pneumatic nail gun. It is incredibly useful, but it doesn't always completely set each nail. In these cases, I manually set the nails after the fact.
-Precision screwdrivers- not just for eyeglasses anymore. It seems as though toy manufactures have taken a liking to tiny screws.
-Mini Mag-Lite- Useful for working in low light areas (e.g. under a bathroom sink)
Other items to consider:
-Eye protection
-Studfinder
-Tape (painter's, electrical, or masking)- depending on your particular home improvement projects, one type may be more useful to you than the others.
-A ruler or straight edge
In addition to the toolkit, you will want a decent cordless drill at your disposal. This will most likely be you most used power tool. I'll cover cordless drills in greater depth in a later post.
Jon
Home Improvement Investments that Make Cents
The Washington Post published an article entitled Projects that Pay that provides recommendations on home improvement projects that give the most bang for your buck at the $1,000, $10,000, and $20,000 thresholds.
$1,000
- Painting- On a per Dollar basis, painting is perhaps the most potent small-scale home improvement project. If you do it yourself, an average sized room will cost less than $100.
- Minor landscaping projects- The article suggests that you address a neglected lawn, add trees, or cut back overgrown shrubs. Since your landscaping shapes a potential buyer's first impression of your home, the money will be well spent.
$10,000
- Create an outdoor living space- Build a deck or patio. If you already have a deck or patio, why not add an outdoor kitchen or a fireplace?
- Overhaul a powder room or small bathroom- Change out the vanity, mirrors, and toilet. Add marble or granite.
- Upgrade lighting- Add recessed lighting or upgrade the electrical panels and circuits so that they can handle more power. The article mentions that not a lot of thought goes into many builder-built houses, making homeowner customization necessary to achieve desired results.
- Create Parking- This may not be applicable, but if you have the ability to create a parking space on your property, why not do it? Parking is extremely valuable.
$20,000
- Make significant changes to the kitchen- A $20,000 budget may not allow for a complete kitchen remodel, but you can make significant improvements such as adding granite counter tops, cabinets, or new floors.
- Renovate the master bathroom- You can completely renovate the master bathroom.
- Upgrade doors and windows- Though not as glamorous as the previous items on the list, the Post article mentions the importance of quality windows and doors. A window upgrade could start to pay for itself in energy savings.
- Major landscaping overhaul- For $20,000, you can afford some significant landscape improvements such as a water feature, a larger deck or patio, or more plants and trees.
According to CalculatedRisk, home improvement investments are holding up fairly well despite the recession. The blog looked at indicators published by the US Bureau of Economic Analysis as part of the release of the 2008 Q2 GDP data. Their conclusion- so far, home improvement investments are holding up better during this housing slump than in the slumps of the early 1980's and early 1990's.
Jon
How to Replace a Toilet Tank Fill Valve
