Homeowners Replacement Cost

[MikeyR]

Hi guys,

The Farmers agent I am working for said he uses a sliding scale of

260/sqft for extremely custom up scale homes
220/sqft for upper middle class
200/sqft for average
180/sqft for fixer upper

Now I was quoting someone who I would consider their area to be upper middle class so

3800*220 = $836,000
Expect the purchase price for this house was $736,000 and we all know land especially in California makes up a large portion of the purchase price. Now even if we add the solar panels and assume that it will cost the exact same $35000 to replace it which brings us to $771,000 the $836,000 seems to be a bit of an overkill.

Am I missing something or is the $220 just overkill to begin with?

 

[fed up]

He uses a sliding scale? Farmers uses the same or similar RCC as the rest of the industry. Remember that the rebuild includes clearing the site in the event of a total loss. Depending on the state and zipcode your estimate is not completely out of line but someone will beat that quote, probably Progressive

 

[MikeyR]

He uses a sliding scale? Farmers uses the same or similar RCC as the rest of the industry. Remember that the rebuild includes clearing the site in the event of a total loss. Depending on the state and zipcode your estimate is not completely out of line but someone will beat that quote, probably Progressive

Interesting I guess your right I think I am probably overthinking it, their current policy is with First American and best us by bout $150/yr but we are able to save them $200/month on auto so it’s a win for them. I am just trying to get a better understanding of the number that the software spits out on the automatic rating

 

[marindependent]

Sorry to tell you this, but there is simply ball park for rebuilding homes, I don't care what anyone tells you.

Why? Because it comes down to:

• Where - the exact location
• When - it can cost $300 now, but $500 when the home burns down [for various reasons]
• Who - What builders and Architects are available to rebuild it after the time of loss?
• What - exactly what are you rebuilding, there are so many intricacies to this its crazy. A mid century modern or a log cabin?
• Massive Details - How many sky lights does the home have, what is the garage location like [and is it attached], how high are the walls and crown molding, does the home have chair rails, is the foundation bolted, and so many other items.

Using ballpark figures only devalues what insurance agents do. Use the software program, add in a some local knowledge, and seek the counsel of the insured in making this decision.

I cannot tell you how many consumers have told me: "No One has Ever asked me how much insurance I want?"

 

[MikeyR]

Sorry to tell you this, but there is simply ball park for rebuilding homes, I don't care what anyone tells you.

Why? Because it comes down to:

• Where - the exact location
• When - it can cost $300 now, but $500 when the home burns down [for various reasons]
• Who - What builders and Architects are available to rebuild it after the time of loss?
• What - exactly what are you rebuilding, there are so many intricacies to this its crazy. A mid century modern or a log cabin?
• Massive Details - How many sky lights does the home have, what is the garage location like [and is it attached], how high are the walls and crown molding, does the home have chair rails, is the foundation bolted, and so many other items.

Using ballpark figures only devalues what insurance agents do. Use the software program, add in a some local knowledge, and seek the counsel of the insured in making this decision.

I cannot tell you how many consumers have told me: "No One has Ever asked me how much insurance I want?"

I think that was quite important that one you are right I can't just use a flat # to cover something that can fluctuate up and down. Also that's a good point about really devauling yourself by using blanket statements but yet providing the local skill.

As usual guys I really do appreciate all the feedback!

 

[WMSG]

Very good thread...thanks everyone.

 

[fed up]

Interesting I guess your right I think I am probably overthinking it, their current policy is with First American and best us by bout $150/yr but we are able to save them $200/month on auto so it’s a win for them. I am just trying to get a better understanding of the number that the software spits out on the automatic rating

People don't usually look at the homeowners premium because most people escrow the hazzard insurance into their mortgage payment. Only when they question the bank about an increase do they look at the homeowners premium and bark. Every carrier will seem to have great rates until they get blasted with a slew of claims and then they are going to be higher then more of the other carriers because they realize they have not done their homework and adjusted rates. Also the cost to replace a home goes up considerable based on the cause of the loss. A hurricane, tornado, fire (California) drives up the proce of material because so much is needed by so many at the same time

 

[InsCommentary]

That’s not a legitimate way to determine replacement cost.

 

[adjusterjack]

Am I missing something or is the $220 just overkill to begin with?

Hard to say. One way to find out though is to use this home replacement cost calculator.

House Cost Estimator | Cost to Build a Home

It's comprehensive, uses up to date labor and material costs, and is pegged for location.

I've used it for my own insurance for several years now and it's always come reasonably close to the figures my insurance company came up with.

Another good estimator is from Craftsman Books. I used it years ago when it was free. You pay for it now.

Appraisal Estimating Software - Craftsman Book Company