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To add to this the standard MSB (Marshall Swift) which is used in the industry will also give costs with and without debris removal.
One thing I noticed alot when I was in underwriting is alot of agents calculate the RCE incorrectly. We noticed many times where there was a B/I garage (living area above) listed when it was actually attached or an attached pool (slab connnecting to the structure) listed as detached. Both of which will have a significant affect on the overall number. As mentioned already in the tgread if you start seeing the number to low it could be trouble. However a slightly higher number doesnt always equate to being incorrect the agent could have added hard wood floors or a custom bathroom based on feedback from the client or photos it all really depends on who is completing the RCE and where they get the information from.
One thing I noticed alot when I was in underwriting is alot of agents calculate the RCE incorrectly. We noticed many times where there was a B/I garage (living area above) listed when it was actually attached or an attached pool (slab connnecting to the structure) listed as detached. Both of which will have a significant affect on the overall number. As mentioned already in the tgread if you start seeing the number to low it could be trouble. However a slightly higher number doesnt always equate to being incorrect the agent could have added hard wood floors or a custom bathroom based on feedback from the client or photos it all really depends on who is completing the RCE and where they get the information from.
Agreed. Having too low a RC causes coinsurance and E&O issues. Having a higher RC means paying a few dollars more in premium. I'd prefer the second option, personally.
That is why the 25% and 50% provision are good.
What screws up people more than incorrect RC is ordinance/law coverage being really low, or not having a good loss assessment for condo/townhomes or for homes with fancy additions like ball courts, pools, and etc. These limits really screw a client if tapped out since the limits can be really low.
That is why the 25% and 50% provision are good.
What screws up people more than incorrect RC is ordinance/law coverage being really low, or not having a good loss assessment for condo/townhomes or for homes with fancy additions like ball courts, pools, and etc. These limits really screw a client if tapped out since the limits can be really low.
agentinnc
Expert
MSB is the main tool that many companies use. (Xactimate/Xactvalue).Many companies or agents have access to a software tool such as this which they can plug in the details (sq ft, number of BA, BR, exterior wall construction, etc). Can get pretty detailed. Alternatively, many companies may allow the use of a contractor estimate or professional appraisal. Proper insurance to value is important to pricing of insurance for consistency and the fact the most HO claims are not total loss (ie, if you are not insuring 100% of the replacement value of the house, how do you know which part of the house isnt covered? get it?). Some carriers have the coinsurance penalty which can be very detrimental if not properly insured.
In this economy we have seen wild fluctuations. Mid 2000s, because of inflated home market values, people were insuring 200k repl cost homes for 400k because that is what they bought them for. Now, people are buying foreclosures for 150k when the repl cost is 225k.
In this economy we have seen wild fluctuations. Mid 2000s, because of inflated home market values, people were insuring 200k repl cost homes for 400k because that is what they bought them for. Now, people are buying foreclosures for 150k when the repl cost is 225k.
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