I bought a house almost a year ago for a little over $148k. It appraised for $155k. I got my homeowners renewal letter the other day which states I have replacement value at $179k. So basically if my house burns down, I get $179k to build a new one. Am I wrong in thinking that I need more than this? I'm thinking $225k or so to rebuild with decent materials etc. I wouldn't think adding that extra coverage would add much to the premium. I also have a separate coverage for contents that I'm happy with the amount.

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Posted by wickowick

Head of Island

Member since Dec 2006

45786 posts

Posted on 10/22/13 at 9:06 pm to nikki6

quote:
I get $179k to build a new one.

Most policies have additional coverage which is, an an incurred cost ~5% of policy limits for as incurred debris removal and up to an additional 20% of policy limits for replacement. Ask your agent about it...

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Posted by ForeverLSU02

Albany

Member since Jun 2007

52147 posts

Posted on 10/22/13 at 9:09 pm to nikki6

I see insurance fraud/arson in someone's future......

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Posted by Ric Flair

Charlotte

Member since Oct 2005

13649 posts

Posted on 10/22/13 at 9:14 pm to nikki6

You still own the lot if your house burns down. Depending on where you live, this can be a decent percentage of total value.

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Posted by Mr.Perfect

Louisiana

Member since Mar 2013

17438 posts

Posted on 10/22/13 at 10:11 pm to nikki6

80% to avoid coinsurance penalties

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Posted by Layabout

Baton Rouge

Member since Jul 2011

11082 posts

Posted on 10/23/13 at 2:35 am to nikki6

Don't worry, the replacement coverage clause will bump it up about 10% a year until you're paying for $350k of coverage. The insurance company is just reeling you in right now.

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