Homeowners coverage

[MIGA1626]

Similar new homes are going for $555k. Your calculator is showing $575k but I did it a level III. It's one story but crazy roof angles.
So $555k - $110k (land value) = $445k.
And $445k + $25k (buffer) =$470k
$470k should be a safe number to insure the house? Even at the $575k number this seems inline.
Thanks for your help!!

The market value of your house means absolutely nothing in this equation. Replacement cost does not equal necessarily replacement cost. 99% of the time in a regular homeowners policy it is only going to be based off replacement cost because the insurance carrier is reimbursing you to rebuild the property back to how it was. Not to cover what its market value is. They are completely independent variables of one another in this situation.

 

[MIGA1626]

USAA isn't using something like Xactware to determine the initial rebuild value?

LOL DUDE YOUR AVATAR WTF LMAO!

 

[Allen Trent]

I'm not rebuilding I'm probably moving

Read your policy. Some policies/coverages discount the claim payoff if you dont rebuild on same location. Instead of receiving the replacement cost of the structure, you may only receive the depreciation amount if you dont rebuild at the insured location

 

[Al3x Lee]

LOL DUDE YOUR AVATAR WTF LMAO!

Can we give him the nickname "Dickhead"? lol

 

[MIGA1626]

Can we give him the nickname "Dickhead"? lol

Absolutely what else would you call him?

 

[Policy Monkey]

I had a very similar conversation with a grouchy old guy some time back. He kept saying "My son is in construction. He would build this house for way less than that Dwelling amount." Finally I said to him "Next time you see your son, ask him how much he would charge you to build the same house. I'm sure he'd give you the best price in the world. Then ask him how much if it were an insurance job, and watch his eyes light up." The old guy paused and said "OK, I see what you're saying." and it never came up again.

My point is that the carriers know they are not getting any breaks from the contractors. So their cost estimators are at top dollar, including parts, labor, profit and overhead, cutting no corners and pulling all permits.

 

[whatyouwantfinally]

I had a very similar conversation with a grouchy old guy some time back. He kept saying "My son is in construction. He would build this house for way less than that Dwelling amount." Finally I said to him "Next time you see your son, ask him how much he would charge you to build the same house. I'm sure he'd give you the best price in the world. Then ask him how much if it were an insurance job, and watch his eyes light up." The old guy paused and said "OK, I see what you're saying." and it never came up again.

My point is that the carriers know they are not getting any breaks from the contractors. So their cost estimators are at top dollar, including parts, labor, profit and overhead, cutting no corners and pulling all permits.

That's a rebuttal hall of fame nominee right there. Great one!

 

[RickyG]

I know that there are arguments in both directions but I am taking the position that my concrete slab on grade with footing would be reusable in the event of a total fire. Therefore I am not including the concrete in my replacement cost calculations.

A fire can ruin the integrity of a slab so I wouldn't assume that

 

[Richard-PDIS]

There are a few carriers that write market value (not ACV) instead of RCV, on a DP form. A LOT of people would rather pay-off the mortgage and walk away with a cushion, and let the insurance company have the land.

 

[Policy Monkey]

A LOT of people would rather pay-off the mortgage and walk away with a cushion, and let the insurance company have the land.

A lot of people think that way, but that's not how it works. Even in a total loss, you still own the land - and the responsibilities that come with it (debris removal, property taxes, code violations, etc.). It's not like a foreclosure where the bank takes over the property. Nor is it like a totaled car where Progressive (for example) hauls off the wreck for salvage.