How You Avoid Coinsurance Clause?

[VaDwayne]

I'm not a builder. I offer a suggestion based on what my carrier says, but it is the clients decision.

The quote you are referring to came from red blooded american, not me..

 

[gavros777]

I run a cost estimator for my client's property 2 days ago and the value came extremely lower than the insurer's appraiser. So i'm asking you guys how can you avoid coinsurance clause if the insurance carrier found the property value higher than your cost estimator?

 

[djs]

Simple.
Go with the insurers appraisal. He does it for a living.
Find out what software they use. Use the same thing.

Also, a lot of building cost estimators are for construction only, not reconstruction. There is a big difference. Also some don't factor profit for the builder into it, just the costs, lets the builder add his profit to the estimate.

Basically, any numbers you run have to include the costs to demolish / remove / dispose of the existing and rebuild it, including a fair profit to the builder. If you use a construction cost estimator, add at least 20% to the numbers it comes up with. If you use a reconstruction cost estimator, you should be good.

Dan

 

[Guest]

^^^^^^^^^^^^^

what he said!

 

[gavros777]

Simple.
Go with the insurers appraisal. He does it for a living.
Find out what software they use. Use the same thing.

Also, a lot of building cost estimators are for construction only, not reconstruction. There is a big difference. Also some don't factor profit for the builder into it, just the costs, lets the builder add his profit to the estimate.

Basically, any numbers you run have to include the costs to demolish / remove / dispose of the existing and rebuild it, including a fair profit to the builder. If you use a construction cost estimator, add at least 20% to the numbers it comes up with. If you use a reconstruction cost estimator, you should be good.

Dan

thanks a lot Dan, you're a great guy i appreciate your help.

 

[Aram Fingal]

I run a cost estimator for my client's property 2 days ago and the value came extremely lower than the insurer's appraiser. So i'm asking you guys how can you avoid coinsurance clause if the insurance carrier found the property value higher than your cost estimator?

Ask for a copy of the property inspection and estimate. See if there is anything in it that is way off of reality. The people who do that are usually pretty good, but I have found errors in them occasionally. They might be miscalculating the square footage or simply entered something wrong. Every once in a blue moon they'll inspect the wrong property. If you find any errors like that, you can talk to underwriting to get it adjusted accordingly.

I once had company estimate come back on a pretty simple little house built in the 70s at roughly $500 per square foot. After I was done laughing I had the underwriter send me a copy of the inspection and the square footage was WAY off, the type of construction was wrong, and the building style was wrong. So it can happen.

However, only be looking to see if their data on that building is the same as yours. If it is, and their calculated replacement cost is still higher, I would go with what they say it should be.