Why does building construction affect insurance premiums?
The “Three Little Pigs” story comes to mind. A straw house will be destroyed easier than the brick house. The exterior construction material of a building will affect both the premium and the replacement cost of the structure. Solid stone exterior walls will generate the lowest premium however the reconstruction value would be the highest. Many buildings will have both a masonry type and wood-frame type exterior walls. The insurance company will generally rate a building as masonry if 70% or more of the exterior walls are of masonry type construction. Problems with Finished Basements Finished basements are the cause of many insurance concerns. Water is the primary concern and is excluded or limited on most insurance policies. Back up of drains, sewers and the failure of sump pumps can cause extensive damage to the building and contents of a basement. Limited coverage for this type of loss can be provided. It is always best to avoid this type of loss. Before you decide to finish your ba
