Texas Homeowner Help

[XXTEXX]

Tried the Texas State site, but like everything government, built confuse not much help.
I am 65 retired fixed income. My home is 2200 sq ft. All insurance companies I have dealt with require 100% board/nail replacement coverage, $200,000.00+. I owe Chase bank $70,000.00 + or -. Why or can I get the amount of coverage I want to purchase to keep Chase Bank covered? Even half $100,000.00 would give me some relief. At one time in this country we could buy what we needed, not what the all powerful institutions make you purchase. I would bet my remaining years on this earth if I had a 100% loss they would screw me down to a much lesser amount than what I have been purchasing for years.

While I am perched high on this box or ledge, Buy a new truck, you pay a price for coverage..new truck... as it ages why does not the insurance cost reduce as replacement would be less. My home has appreciated, but my truck has depreciated. Just a thought.
Trying to stretch my retirement to last my life.

 

[Bobby]

Try to find independent agent who can write modified replacement cost. Because if full replcement is $200,000 some modify replacent can be wrote at 50% of full replacement

 

[djs]

Couple of questions....

What would you do if the house burned to the ground? You wouldn't have the money to rebuild it.

Do you realize that reducing the dwelling amount by a half doesn't reduce the premium very much? Yes, its lower, but its not half.

If you manage to get a modified policy, be careful of the coinsurance that can be required with insuring for less.

A much better way to lower your premium is usually to raise your deductible. This leaves your catastrophic coverage intact for any big losses, but means for minor things like fences, you may have no coverage.

Dan

 

[Josh]

Adding to what Dan said, I think some companies will write an ACV policy.

To your car example, if you have a car and you have an accident, you can in theory take the amount of money they settle for and buy a comparable vehicle and be back to where you were. If your house burns to the ground, it's much more difficult to do the same thing.

On a side note, if this is causing any serious problems with your retirement, you probably want to take a look at the big picture too. maybe even get into a smaller house

 

[kdong]

@XXTEXX, I definitely can help you out with that. I do have 3 different carriers that is okay to write your house at the value that you wanted. PM me if you interested.

 

[MORGRUTH]

Insuring for anything less than replacement cost will definitely trigger the co-insurance clause. You want to insure your house for half of what it would cost to replace it. If it burns, which half are you going to replace with your own money? Your lender may require you to rebuild or pay off the loan, leaving you with an additional loan for the other half of the house or a pile of smoking ruins and no cash to rebuild or re-buy your house.

You might try talking to your lender about allowing you to insure for Actual Cash Value, which is the depreciated value, but be careful. In the event of a partial loss, each item damaged is depreciated based on its average life expectancy. If you have a 20 year old comp roof, and it's life expectancy is 30 years, then two-thirds of its life is used up, and they will depreciate it by 66%. Some policies will depreciate items 100%, so make sure you ask your agent what the maximum depreciation will be, as others only depreciate to 50%.

A lot of lenders require you to insure for 100% of replacement cost regardless of how much you owe, and will force-place insurance and add it to your payment each month if you do not provide coverage they agree to. If they do agree to ACV coverage, get it in writing, too, as you will have that to show them if they try to force-place it in the future, especially if your loan is sold.

Above all, talk to your agent and before you make a decision, ask yourself: Can I afford to go without this coverage if the worst happened?

 

[TrustedAdvisor]

Not worth taking a chance on insuring below the RC valuation IMO