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Do you have enough insurance coverage on your house?

(AP Photo/Noah Berger)

Sometimes we can learn from other's mistakes.

A Consumer Reports' survey found that 18 percent of its members who filed a claim last year after Hurricane Harvey, Hurricane Irma or the California wildfires were under- insured. That can be a serious problem when your house is a total loss.

"It actually happens fairly frequently, in as many as 3 out of 5 homes, they find out after a loss that they don't have enough insurance to rebuild it due to the cost of building materials and labor,” said Kenton Brine, president of the NW Insurance Council.

Rather than insuring for actual cash value, the amount it would cost to replace the house minus depreciation, you may want to consider full replacement coverage.

Brine says there are two major types.

“One is called extended replacement cost which is a certain percentage above our policy limit,” he explained. “Guaranteed replacement cost covers rebuilding your home no matter what it costs after a total loss.”

Replacement coverage costs 10 to 20 percent more, but it will pay to rebuild your house exactly as it was – even if the amount exceeds the estimated value.

Note: Some homes, especially older ones with unique and expensive features, may not qualify.

More Info: Will Your Homeowners Insurance Come Through After a Natural Disaster?

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