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Message
How much should I insure a house for?
Posted on 10/16/20 at 1:50 pm
Posted on 10/16/20 at 1:50 pm
I know the bare minimum would be the rebuilding cost, how much would I expect to pay in a total loss scenario where the structure needs to be bulldozed and replaced? I know living expenses need to be calculated as well. Anyone have the unfortunate experience dealing with a total loss of a property and what it took to replace?
7
Posted on 10/16/20 at 1:52 pm to Boss13
The insurance typically gives an estimate, you think it is high, and it might be in normal times, but it isn't when catastrophe damage happens...
Posted on 10/16/20 at 2:00 pm to wickowick
I’ve never had a agreed upon value policy on a house, the insurance carrier has always set the insured value and also raised it every few years.
Posted on 10/16/20 at 2:52 pm to Boss13
quote:That isn't the bare minimum, that is what you insure it for
I know the bare minimum would be the rebuilding cost,
Insurance companies do not give a damn what your market value, purchase price, or land value is (they do not insure these things). The goal is to insure the home for what it would cost to rebuild a home of similar like, kind, quality in the event of a complete loss. Insuring anything above that would be a waste of money
I can tell you that a total loss is extremely extremely rare even in the event of fire and tornados
Most insurance companies have cost estimators that input the info you give on the home and spit out a replacement cost. Generally I would say $100-$115 per square foot for standard build, $115-$125 for semi-custom (these could vary slightly based on location)
If you have an appraisal look at the cost approach section and you will see an area mark cost to build new
This post was edited on 10/16/20 at 5:10 pm
Posted on 10/16/20 at 3:03 pm to ThePoo
quote:
$100-$115 per square foot for standard build, $115-$125 for semi-custom
1990 called and wants its prices back.
Posted on 10/16/20 at 3:19 pm to jbgleason
I am assuming the OP lives in lafayette and not Boca
Rebuild costs in louisiana are not very high, even the high end custom homes (new construction) outside of New Orleans will range from $150 - $175 a Square foot in replacement cost estimators
I regularly see homes with $85 - $95 a square foot cost new valuations
Rebuild costs in louisiana are not very high, even the high end custom homes (new construction) outside of New Orleans will range from $150 - $175 a Square foot in replacement cost estimators
I regularly see homes with $85 - $95 a square foot cost new valuations
This post was edited on 10/16/20 at 5:02 pm
Posted on 10/16/20 at 3:27 pm to Boss13
Do keep in mind that the lot will not be destroyed in a fire. So that does not need to be insured.
Posted on 10/16/20 at 4:24 pm to ThePoo
Your numbers seem very low. My build cost in Baton Rouge 7 years ago were around $165/sq foot for just the build - no land or other costs included.
Posted on 10/16/20 at 4:44 pm to jfw3535
For the record I worked within these insurance costestimators for over a decade, my current profession has me working with them as well and diving into appraisals on a daily basis. It is important to note that the replacement valuations in these insurance costestimators are not the same as construction cost (they will generally be lower than cosntruction cost). Replacement cost and costruction cost are different valuations
Generally the appraisals give the best idea of replacement value under "total estimate of cost-new" although these can vary to a big degree between appraisers and be more in line with actual construction cost. Even the costestimators from insurance company to insurance company could vary, some you MSB, some use 360, some use E2
Just had one today that was $170 a square foot outside of new orleans,. Completely custom stucco home with custom light fixtures, custom luxury finishes, custom flooring, even a refrigerated room for wine. Arch Shingle, 3 car finished and air conditioned garage, and outdoor kitchen, 3700 Square feet. Totally beautiful luxury home that i can assure you cost more to build than any comp in the near area
Your average home should not be close to $165 in replacement value in these insurance costestimators
Generally the appraisals give the best idea of replacement value under "total estimate of cost-new" although these can vary to a big degree between appraisers and be more in line with actual construction cost. Even the costestimators from insurance company to insurance company could vary, some you MSB, some use 360, some use E2
Just had one today that was $170 a square foot outside of new orleans,. Completely custom stucco home with custom light fixtures, custom luxury finishes, custom flooring, even a refrigerated room for wine. Arch Shingle, 3 car finished and air conditioned garage, and outdoor kitchen, 3700 Square feet. Totally beautiful luxury home that i can assure you cost more to build than any comp in the near area
Your average home should not be close to $165 in replacement value in these insurance costestimators
This post was edited on 10/16/20 at 4:55 pm
Posted on 10/16/20 at 4:51 pm to jfw3535
also keep in mind that your coverage A with most insurance companies will inflate about 2%-4% each year to keep up with inflation
However these increases tend to outpace actual inflation so within a matter of a couple years the inflation on your coverage A could cause your coverage to be siginificantly higher than your actual replacement cost
However these increases tend to outpace actual inflation so within a matter of a couple years the inflation on your coverage A could cause your coverage to be siginificantly higher than your actual replacement cost
This post was edited on 10/16/20 at 4:52 pm
Posted on 10/16/20 at 5:23 pm to ThePoo
quote:
However these increases tend to outpace actual inflation so within a matter of a couple years the inflation on your coverage A could cause your coverage to be siginificantly higher than your actual replacement cost
That's why we have states with valued policy laws. In the event of a total loss they are required to pay the the amount of the significantly higher dwelling limit instead of the lower replacement cost.
Posted on 10/16/20 at 5:44 pm to weadjust
Louisiana is one
The issue is you will be paying a premium based on that significantly higher dwelling limit. Essentially paying to be over insured while each year paying a little more to be a little more over insured. And really the only time that it is beneficial is in the event of a complete loss which is very rare
Someone companies will allow you to counteract the coverage A inflation with a new costestimator but several will not
The issue is you will be paying a premium based on that significantly higher dwelling limit. Essentially paying to be over insured while each year paying a little more to be a little more over insured. And really the only time that it is beneficial is in the event of a complete loss which is very rare
Someone companies will allow you to counteract the coverage A inflation with a new costestimator but several will not
This post was edited on 10/16/20 at 5:48 pm
Posted on 10/16/20 at 6:31 pm to ThePoo
To me if you are in doubt as to whether you have sufficient coverage and want to be better safe than sorry, leave you’re coverage A at the replacement cost estimate and get the additional replacement cost endorsement. That will add 20-25% to coverage A in the event it is needed but it will keep your deductibles and additional coverages down because it does not actually raise your coverage A.
In most cases this is a slightly cheaper way of getting that additional replacement coverage if you are concerned because your other coverages are based off of a percentage of your coverage A in most instances
In most cases this is a slightly cheaper way of getting that additional replacement coverage if you are concerned because your other coverages are based off of a percentage of your coverage A in most instances
Posted on 10/16/20 at 7:29 pm to Boss13
I’m not an expert. But my parents house just got wrecked from Laura. For a complete gut on a 3000 sq ft house, just the gutting process and equipment to pull moisture is $60,000.
So rebuild cost + $20 sqft for restoration?
That falls in line just about what USAA suggested for me on my house when getting a quote a few weeks ago.
*Obviously that I am worst case scenario but that’s what insurance is for*
So rebuild cost + $20 sqft for restoration?
That falls in line just about what USAA suggested for me on my house when getting a quote a few weeks ago.
*Obviously that I am worst case scenario but that’s what insurance is for*
This post was edited on 10/16/20 at 7:30 pm
Posted on 10/16/20 at 8:30 pm to BallsEleven
FYI, if the home is being gutted, they should not be running equipment to dry the wood.
Posted on 10/16/20 at 8:54 pm to wickowick
Their house isn’t the only one. 2 other relatives have had their houses gutted and fans/dehumidifiers going for a few days.
Posted on 10/16/20 at 8:59 pm to wickowick
Wick, Why not?
Not being a dick, genuinely interested.
Not being a dick, genuinely interested.
This post was edited on 10/16/20 at 9:00 pm
Posted on 10/16/20 at 9:06 pm to Contender54
When all the building materials are removed, the wood framing will naturally dry out pretty quickly. When you have new construction and the home gets rained on you don't run fans and dehumidifiers to dry the home.
A contractor/mitigation company running that equipment in a gutted house is just padding their fee bill.
A contractor/mitigation company running that equipment in a gutted house is just padding their fee bill.
Posted on 10/16/20 at 11:31 pm to Boss13
Your living sq. ft. x $150 = your insured amount
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