I know this topic is brought up fairly often here but I had a few other questions. How does one go about estimating the replacement costs for the home? Also do all lenders require the homeowner's insurance to be greater than the mortgage or can i just cover replacement costs? Finally, what are some specific ways I can lower my premium (besides the usual increase deductible, shop around, etc)? Thanks for the help.

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Posted by tiger91

In my own little world

Member since Nov 2005

40238 posts

Posted on 4/20/12 at 9:25 pm to TypoKnig

1) Our insurance lets you write up to a certain % of the structure coverage for contents (Farm Bureau). Ours isn't nearly enough if you start counting every toothbrush, plate, fork, etc not to mention the big things. Not sure how other companies do it and that's who we have to use due to business dealings.

2) Check with your lender ... I know that we have more than our loan amount. We may be overinsured but I'd rather be able to replace my house and not look for the money (other than ded) should it blow away in a hurricane or tornado etc.

3) I would think alarm system (we don't have one), and I know that ours asks for distance to a fire station and hydrant so that may or may not affect it.

I am in no way knowledgeable in this area ... just telling you from personal experience.

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Posted by Layabout

Baton Rouge

Member since Jul 2011

11082 posts

Posted on 4/21/12 at 12:03 am to TypoKnig

Your insurance company more than likely uses Marshall & Swift to determine the replacement cost of your home based on the square footage. There is a very detailed questionnaire that is used to value the quality of construction materials for replacement purposes. Ask your underwriter to review your valuation.

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