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Started By
Message
Home Value - Insurance Question
Posted on 6/2/15 at 9:16 am
Posted on 6/2/15 at 9:16 am
So back in 2010 I bought our current home and it was a dump. It had a guest house that was in decent shape, so we bought it so we could live in the GH and renovate. After 10 months of renovations, we moved in. Now that baby #2 is on the way, I just finished renovating the guest house into a Bar/Gameroom/Outdoor Kitchen with a Bedroom and Bathroom. When I bought the home it was a foreclosure so needless to say, in the shape it was in it barely appraised for more than I paid for it, which wasnt much. Needless to say, the home is in much better shape now than it was 5 years ago.
My question about all of this, should I have my home reappraised for insurance purposes? Also, if I were to have it reappraised, would that affect my property tax or am I paying property taxes on how much I spent?
My question about all of this, should I have my home reappraised for insurance purposes? Also, if I were to have it reappraised, would that affect my property tax or am I paying property taxes on how much I spent?
6
Posted on 6/2/15 at 9:22 am to lsuhunt555
You should have it reappraised for insurance value (forgot the actual term) NOT for market value. Give that appraisal to your insurance company so they can update your home. Or you can just call your insurance company and ask for a reinspection to update your policy.
I think this will affect your property taxes as well. Maybe not immediately but eventually it will catch up.
I think this will affect your property taxes as well. Maybe not immediately but eventually it will catch up.
Posted on 6/2/15 at 10:02 am to TDsngumbo
Your property taxes should NOT be affected.
In Louisiana taxes are reassessed every four years. The parish assessor will assign a value in which to base taxes.
If the property is sold, the new sales price is typically used for tax purposed.
Talk to your insurance agent and tell him you want to up your coverage. See what he suggests.
In Louisiana taxes are reassessed every four years. The parish assessor will assign a value in which to base taxes.
If the property is sold, the new sales price is typically used for tax purposed.
Talk to your insurance agent and tell him you want to up your coverage. See what he suggests.
Posted on 6/2/15 at 10:09 am to lsuhunt555
If you pulled building permits for the work, the parish assessor will use those for assessment purposes.
Posted on 6/2/15 at 10:10 am to lsuhunt555
Talk with your agent...
Posted on 6/2/15 at 12:40 pm to lsuhunt555
depending on what state and parish(or county ) you live in. In most states every 2 years the county or parish re-appraises your house for tax purposes. An appraisal paid that you have done will not be seen by the tax office. I strongly advise having the house appraised for insurance purposes. you do not want to have enough coverage.
Posted on 6/2/15 at 1:22 pm to hawkeye007
simply call your agent. He will ask questions concerning sq ft # bath, location and come up with a evaluation. From that your ins rate will be set.
However , bear in mind you probably had to get a building permit & sooner or later the parish appraiser will re-evaluate your property
CAN'T DODGE TAXES
However , bear in mind you probably had to get a building permit & sooner or later the parish appraiser will re-evaluate your property
CAN'T DODGE TAXES
Posted on 6/2/15 at 1:42 pm to lsuhunt555
quote:
should I have my home reappraised for insurance purposes?
very likely... read the policy regarding coinsurance penalty.
IRMI
decent link on the subject
ETA: basically is says that in a loss you get penalized. Because you were not paying premium to cover the entire value.
$400,000 value
$250,000 insured
80% coinsurance clause
zero deductible for example only
$300,000 loss
claims adjuster comes out and writes you a check for 300 K if you are insured to 400.
since you are insured to less than 80% of value the loss would be paid like this:
300k loss
250K insurance 'did carry'
400k insurance 'should have carried
did over should = .625
300K * .625 = $187,500 paid to you for the loss
you just self insured the remaining 112,500.
This post was edited on 6/2/15 at 1:50 pm
Posted on 6/2/15 at 3:41 pm to lsuhunt555
My insurance lets me decide how much coverage I want. 
Posted on 6/2/15 at 9:58 pm to Armymann50
quote:
My insurance lets me decide how much coverage I want
So you have no coinsurance clause?
Posted on 6/3/15 at 6:54 am to Mr.Perfect
Fixed it for you. The should is the 80% not full value
$400,000 value
$250,000 insured
80% coinsurance clause
zero deductible for example only
$300,000 loss
claims adjuster comes out and writes you a check for 300 K if you are insured to 400.
since you are insured to less than 80% of value the loss would be paid like this:
300k loss
250K insurance 'did carry'
320k insurance 'should have carried
did over should = .781
300K * .781 = $234,375 paid to you for the loss
$400,000 value
$250,000 insured
80% coinsurance clause
zero deductible for example only
$300,000 loss
claims adjuster comes out and writes you a check for 300 K if you are insured to 400.
since you are insured to less than 80% of value the loss would be paid like this:
300k loss
250K insurance 'did carry'
320k insurance 'should have carried
did over should = .781
300K * .781 = $234,375 paid to you for the loss
Posted on 6/3/15 at 9:23 am to mctiger1985
quote:
Fixed it for you. The should is the 80% not full value
It certainly can be 80% if the coinsurance number is 80%. But you run a risk trying to skate exactly on the line.
But you are correct that 80% is all they must have to avoid the penalty
Posted on 6/4/15 at 9:08 am to Mr.Perfect
quote:
So you have no coinsurance clause?
Like me he probably has a policy that guarantees replacement value on the house.
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