Ramhock Posted October 5, 2011 Share Posted October 5, 2011 Hadn't bought one in ten years but I don't recall this scenario. We bought & were appraised for 175K. Long time insurer said they did a driveby. They called and said we should insure for 250K? Are construction costs getting away from home values? Is my insurer looking for some extra ching? The house is 65 years old, in very good shape, in a developement of similar homes but nothing unusual. Thanx in advance. Quote Link to comment Share on other sites More sharing options...
lkirc Posted October 5, 2011 Share Posted October 5, 2011 Market values don't determine the replacement cost you insure your home for. Usually some type of replacement cost tool is used to determine what it would cost, at current construction costs, to rebuild your home. Most insurers also make an added percentage (20%) available, if needed, when you insure your home for at least 100% of the calculated replacement cost. I have client who recently purchased their homes for $100,000 or so and have them insured for $500,000 +. Strange times indeed...... If you have any specific questions, feel free to PM me. Quote Link to comment Share on other sites More sharing options...
Ditkaless Wonders Posted October 5, 2011 Share Posted October 5, 2011 Home and contents? Quote Link to comment Share on other sites More sharing options...
Yukon Cornelius Posted October 5, 2011 Share Posted October 5, 2011 Hadn't bought one in ten years but I don't recall this scenario. We bought & were appraised for 175K. Long time insurer said they did a driveby. They called and said we should insure for 250K? Are construction costs getting away from home values? Is my insurer looking for some extra ching? The house is 65 years old, in very good shape, in a developement of similar homes but nothing unusual. Thanx in advance. my house was re-assets at 285,000 last spring , down .... and i have it insured for 500,000 Quote Link to comment Share on other sites More sharing options...
The Irish Doggy Posted October 5, 2011 Share Posted October 5, 2011 Yeah, it's all about replacement cost of the home. I'm insured an extra 10% over that even. Quote Link to comment Share on other sites More sharing options...
rajncajn Posted October 5, 2011 Share Posted October 5, 2011 Home and contents? That's what makes up the difference. You'd be very surprised how quickly things add up when you face replacing everything you own. Quote Link to comment Share on other sites More sharing options...
SEC=UGA Posted October 5, 2011 Share Posted October 5, 2011 Homes are selling for below replacement cost. They are charging you for what they would believe it would cost to rebuild that home in a total loss scenario. THis is another reason why appraisers/appraisals are pretty much useless and should be banned or better educated. Quote Link to comment Share on other sites More sharing options...
matt770 Posted October 5, 2011 Share Posted October 5, 2011 Just found out my insurer's underwriter came out and inspected our house and they want us to put up a railing on our front porch and hand rails on the steps. This is after we already paid for the policy. So I need to spend $600+ to get that done or shop for another policy. Quote Link to comment Share on other sites More sharing options...
twiley Posted October 5, 2011 Share Posted October 5, 2011 Just found out my insurer's underwriter came out and inspected our house and they want us to put up a railing on our front porch and hand rails on the steps. This is after we already paid for the policy. So I need to spend $600+ to get that done or shop for another policy. Yeah, they're a bunch of evil bastards. A few years back when our policy was up for renewal an underwriter came out to our house reviewed the property then gave us a list of things we had to do in order to get insured. Most of it was on our shed in the back - 50 yards from the house. I had to put a whole new roof on the damn thing in order to get the house insured. Complete racket, we now have a different provider. Quote Link to comment Share on other sites More sharing options...
MrTed46 Posted October 5, 2011 Share Posted October 5, 2011 Just get replacement cost or else you are wasting your money. If you want to leave a buffer go for it (I wouldn't). Quote Link to comment Share on other sites More sharing options...
Yukon Cornelius Posted October 5, 2011 Share Posted October 5, 2011 THis is another reason why appraisers/appraisals are pretty much useless and should be banned or better educated. +1 Quote Link to comment Share on other sites More sharing options...
lennykravitz2004 Posted October 5, 2011 Share Posted October 5, 2011 (edited) Home and contents? It's a double-edged sword. If a person "does what's right", they'll video their home interior "in the event", and video everything including things like clothes, laundry basket, kitchen utensils, etc.. This will help get you close-ish to recovering your contents. On the flip side, in that recording, your insurance company can now see (potentially) why you had that fire, or that you did not have a fire extinguisher anyplace in your home. Edited October 5, 2011 by lennykravitz2004 Quote Link to comment Share on other sites More sharing options...
Double Agent Posted October 5, 2011 Share Posted October 5, 2011 You used to be able to insure your home for an agreed value. Those days are gone. Insurance companies got tired of getting sued because a person couldn't rebuild there home for the insured amount. I don't know of any company that doesn't require at least 80% replacement cost coverage. Quote Link to comment Share on other sites More sharing options...
lkirc Posted October 6, 2011 Share Posted October 6, 2011 Contents are insured seperately from the replacement cost. Usually it is a percentage (80%) of the dwelling (Replacement) coverage. The advice to video tape or snap photos of your personal property is excellent. It is very difficult for people who have a total loss to remember everything. Just don't keep the file on your computer. They burn too. Insurance is there to "make you whole" and most insurance companies will do a stand up job in the case of a total loss. It is the smaller claims where you may get nickeled and dimed. Quote Link to comment Share on other sites More sharing options...
paulzale Posted October 6, 2011 Share Posted October 6, 2011 Replacement of dwelling should be 20-50% more than value of home. Think about cleaning up the debris, repairing foundation or removing and replacing then rebuilding the house. It should definitely cost more than building on a clean lot. Not to mention if a natural disaster rolls through and wipes out most of the 'hood. Then labor is more in demand, building materials too, so costs go up. That is why you should insure replacement of dwelling for more than building costs. Oh, I think it was mentioned that contents is a separate line item and not part of dwelling replacement. Quote Link to comment Share on other sites More sharing options...
The Holy Roller Posted October 7, 2011 Share Posted October 7, 2011 What if a total loss occurs but you don't want to rebuild/replace? Does the insurance company just write a fat check? Insurance is a scam. Quote Link to comment Share on other sites More sharing options...
lkirc Posted October 7, 2011 Share Posted October 7, 2011 What if a total loss occurs but you don't want to rebuild/replace? Does the insurance company just write a fat check? Insurance is a scam. No they do not have to write you a fat check, but they might come to a settlement with you. Insurance is there to make you whole. It is not there so you can profit from a loss. I am interested to hear how you think insurance is a scam. You decide how much risk you want to pass along to another party to protect you from a large loss and you pay that party for their promise to make you whole. Most people who have had a large loss without insurance would not consider insurance a scam. Now health insurance is a whole nother story....... Quote Link to comment Share on other sites More sharing options...
NSab Posted October 7, 2011 Share Posted October 7, 2011 We have had tons of rain lately. My basement flooded because my sump pump french drain could not keep up with it. My insurance informed me they DO NOT cover over saturated ground water. GRRRRRRR, the are a scam! Quote Link to comment Share on other sites More sharing options...
The Holy Roller Posted October 7, 2011 Share Posted October 7, 2011 No they do not have to write you a fat check, but they might come to a settlement with you. Insurance is there to make you whole. It is not there so you can profit from a loss. I am interested to hear how you think insurance is a scam. You decide how much risk you want to pass along to another party to protect you from a large loss and you pay that party for their promise to make you whole. Most people who have had a large loss without insurance would not consider insurance a scam. Now health insurance is a whole nother story....... The value of my rental house has dropped to $125K yet my home owners insurance has gone up. Insurance companies are in business to make THEMSELVES a profit, not necessarily to make me whole. Quote Link to comment Share on other sites More sharing options...
Double Agent Posted October 7, 2011 Share Posted October 7, 2011 The value of my rental house has dropped to $125K yet my home owners insurance has gone up. Insurance companies are in business to make THEMSELVES a profit, not necessarily to make me whole. Read the posts above. Your value has dropped...the cost to build your home hasn't. The insurance companies don't care to insure your house for market value. They tried that and got their collective asses sued off. Quote Link to comment Share on other sites More sharing options...
The Holy Roller Posted October 8, 2011 Share Posted October 8, 2011 Read the posts above. Your value has dropped...the cost to build your home hasn't. The insurance companies don't care to insure your house for market value. They tried that and got their collective asses sued off. So they changed the rules to make sure they could continue to make outrageous profits. Read the posts above. All insurance companies want is your premium. Not making their policy holders whole. They are betting nothing happens (which statistically is most likely). And when something does happen their primary response is to pay out as little as they can get away with. I don't like insurance companies, health, life, home, or auto. Quote Link to comment Share on other sites More sharing options...
Ramhock Posted October 8, 2011 Author Share Posted October 8, 2011 Was insured for 192K, the 10% above. I talked to the agent & their inspector had the sq ft at 1800, when the appraisal had 1650. I asked if that whatever I insure for, can I use that amount, in this infitesimally small odds scenario, she said indeed. I increased it to 240K, a $6/mnth increase. Quote Link to comment Share on other sites More sharing options...
lkirc Posted October 8, 2011 Share Posted October 8, 2011 So they changed the rules to make sure they could continue to make outrageous profits. Read the posts above. All insurance companies want is your premium. Not making their policy holders whole. They are betting nothing happens (which statistically is most likely). And when something does happen their primary response is to pay out as little as they can get away with. I don't like insurance companies, health, life, home, or auto. [/quote Some companies do try to avoid paying claims, but not all. What company isn't in business to make profits? Let's say your house is worth 125K on the open market and you insure it for that much. Then your house burns down. You turn to your insurance company and say, "Rebuild it', The contractor says, "It is going to cost $200,000 to rebuild it." Where is that extra $75,000 going to come from? You will be singing a different tune then, wishing you had listen to your agent and paid the extra $100 a year in premium. You can insure your home for less than calculated replacement cost, but the only companies that will do something so irresponsible are the ones that don't pay claims ethically. Quote Link to comment Share on other sites More sharing options...
lkirc Posted October 8, 2011 Share Posted October 8, 2011 We have had tons of rain lately. My basement flooded because my sump pump french drain could not keep up with it. My insurance informed me they DO NOT cover over saturated ground water. GRRRRRRR, the are a scam! This sucks, Homeowners policies don't cover flooding from outside water. I make sure my customers understand this. If they are worried about flooding, they need to obtain Flood Insurance. Unfortunately, no private company could profitably offer flood insurance. The government took over the program and now it is priced so high no one can afford it. I wish I could offer you some solution, but this is one of those things that just plain suck about insurance. Quote Link to comment Share on other sites More sharing options...
The Holy Roller Posted October 9, 2011 Share Posted October 9, 2011 So they changed the rules to make sure they could continue to make outrageous profits. Read the posts above. All insurance companies want is your premium. Not making their policy holders whole. They are betting nothing happens (which statistically is most likely). And when something does happen their primary response is to pay out as little as they can get away with. I don't like insurance companies, health, life, home, or auto. [/quote Some companies do try to avoid paying claims, but not all. What company isn't in business to make profits? Let's say your house is worth 125K on the open market and you insure it for that much. Then your house burns down. You turn to your insurance company and say, "Rebuild it', The contractor says, "It is going to cost $200,000 to rebuild it." Where is that extra $75,000 going to come from? You will be singing a different tune then, wishing you had listen to your agent and paid the extra $100 a year in premium. You can insure your home for less than calculated replacement cost, but the only companies that will do something so irresponsible are the ones that don't pay claims ethically. I would ask for a check for $125K. Then I would build something that cost $125K to build. Seems pretty straightforward. Quote Link to comment Share on other sites More sharing options...
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