Annoying Newby Questions

[Tristan Bills]

I'm embarrassed to even ask this, but I'm running on two hours of sleep and unable to find anything else in the forums or in my carrier's help files. So any direction would be appreciated.

I have a few InsurTech carriers that provide different replacement cost estimates, I know this is to be expected. They automatically place this in Coverage A and provide an RCE, easy-peasy. Outside of my InsurTech carriers I'm running quotes through the EZLynx rater, but all of them are quoting the Purchase Price for Coverage A.

The first question I have is this, should I enter one of the InsurTech carrier's estimated replacement cost in the Purchase Price field in EZLynx for an adequate comparison of coverage? I'm sure these carriers will have their own estimates before binding. I'm just trying to make sense of it so I can explain it to my clients.

Last question, is there a tool somewhere that can help me create a side-by-side comparison for my clients? Kind of like the image below?



Again, any help is greatly appreciated.

 

[JWP]

Coverage A should be high enough to cover the cost to rebuild the home. That comparison sheet varies from $242k to $399k. I get that each carrier has their own RCE, but there should not be a massive difference like that.

To start a home quote in EZLynx, I'll typically take the Square Footage x $175 for coverage A. After bridging to the carrier site, I'll fine tune Cov A on their RCE.

If the purchase price is higher than my calculations and they are not buying acreage or lakefront property, I'll bump up coverage A to cover the loan.

 

[MVI]

Coverage A should be high enough to cover the cost to rebuild the home. That comparison sheet varies from $242k to $399k. I get that each carrier has their own RCE, but there should not be a massive difference like that.

To start a home quote in EZLynx, I'll typically take the Square Footage x $175 for coverage A. After bridging to the carrier site, I'll fine tune Cov A on their RCE.

If the purchase price is higher than my calculations and they are not buying acreage or lakefront property, I'll bump up coverage A to cover the loan.

100% on the square footage times a typical rebuild cost. I then add the 25% additional replacement cost endorsement to be extra careful.

If a home needs to be rebuilt then real builders build it. The question is, how do builders price out a job? They do so by price per sq. feet.

 

[Tristan Bills]

To start a home quote in EZLynx, I'll typically take the Square Footage x $175 for coverage A. After bridging to the carrier site, I'll fine tune Cov A on their RCE.

That makes sense to me, I misread the "Dwelling" field in EZLynx as the Sales Price, it didn't help that there's also an "Est. Replacement Cost" field. I don't see it pulling that number through to the quotes at all!

When you're calculating Square Footage x $175, are you just doing above ground?

 

[JWP]

Yeah, I don't get why EZ has two fields there. I use the same value in both.

$175 x above ground. If there's not basement or no attached garage, round down a little. If the basement if finished nice, round up. Regardless, this is just a number to get me in the "ballpark" of proper Coverage A. Labor & Materials vary, so you might find that $175 is not the best number for your area.

 

[Tristan Bills]

You've been a great help, my friend. Might I impose one annoying newby question? My clients are interested in Earthquake coverage since we're in Utah and they've been happening with increased frequency. How do I determine their "Earthquake Zone"?

 

[marindependent]

Sir - I would advise you to put a lot more consideration and thought into rebuid amounts. A 25% extended rebuild amount can put you in a lot of hot water if your estimates are a tiny amount off.

Consider making the rebuild amount part of the sales discussion - you will close more valuable sales.

 

[MIGA1626]

I have always loathed replacement cost and their damn estimators. Sounds like fields being criss crossed in your rater. I have never had any luck with the raters I just do it old school. My advice on RCEs are better safe than sorry. Put all the correct info into the estimator and work within the limitations the carriers provide. More rural markets people are fighting to lower the value. In high demand commercial areas the banks demand unrealisticly high numbers. It's a constant battle. You will get to know the general ball park of construction cost in your area over time but the fact is is that it is very subjective and arbitrary.