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Started By
Message
Homeowner's insurance quotes - grossly overestimating value of a rebuild
Posted on 7/3/24 at 9:50 am
Posted on 7/3/24 at 9:50 am
We've had Lemonade since COVID and they are increasing our premium 28% for the upcoming year, so we are obviously shopping around.
First few companies are quoting CRAZY high premiums, saying our house will cost 850k to re-build so that is why the premium is so high. We don't live on a river or lake, so what the frick? Is this over-pricing BS normal nowadays?
NFW it would cost anywhere near that much to re-build it....we don't have anything fancy or luxurious whatsoever.... VERY average home.
FYI, we paid 255k for our home 8 years ago, it was built in 1991.
You can leave out the snarky "subtle brag" comments, this is a legit question from a normal, middle class, hard-working American.
First few companies are quoting CRAZY high premiums, saying our house will cost 850k to re-build so that is why the premium is so high. We don't live on a river or lake, so what the frick? Is this over-pricing BS normal nowadays?
NFW it would cost anywhere near that much to re-build it....we don't have anything fancy or luxurious whatsoever.... VERY average home.
FYI, we paid 255k for our home 8 years ago, it was built in 1991.
You can leave out the snarky "subtle brag" comments, this is a legit question from a normal, middle class, hard-working American.
31
Posted on 7/3/24 at 9:51 am to HoustonGumbeauxGuy
Common complaint.
Posted on 7/3/24 at 9:52 am to HoustonGumbeauxGuy
What you paid for it is completely irrelevant to what it costs to build today. It may be overvalued, but we have no way to know that
Posted on 7/3/24 at 9:53 am to HoustonGumbeauxGuy
quote:
You can leave out the snarky "subtle brag" comments
Subtle ' I pick up on the snarky "subtle brags" ' brag
This post was edited on 7/3/24 at 9:54 am
Posted on 7/3/24 at 10:17 am to HoustonGumbeauxGuy
Only way to really know is to rebuild one just like it to prove to the insurance company how much it cost. Save your receipts because they won't believe you.
Posted on 7/3/24 at 10:18 am to slacker130
quote:
Save your receipts because they won't believe you.
receipts of what
Posted on 7/3/24 at 10:25 am to HoustonGumbeauxGuy
Homeowners insurance is as bad as auto insurance in the scam department.
You pay for a "dwelling value" that is 40%+ over the appraisal they require. Then, when you file a claim, they lowball you on the cost to repair/rebuild.
If you are an insurance agent, I about 0.5% more respect for you than I do far a Fla Blvd used car salesman. (And I have family that are in the insurance business.)
You pay for a "dwelling value" that is 40%+ over the appraisal they require. Then, when you file a claim, they lowball you on the cost to repair/rebuild.
If you are an insurance agent, I about 0.5% more respect for you than I do far a Fla Blvd used car salesman. (And I have family that are in the insurance business.)
Posted on 7/3/24 at 10:28 am to Boudreaux35
quote:
You pay for a "dwelling value" that is 40%+ over the appraisal they require.
you acting like insurance companies are "THEY" that requires appraisals. stupid. quote:
If you are an insurance agent, I about 0.5% more respect for you than I do far a Fla Blvd used car salesman. (And I have family that are in the insurance business.)
that's cool but the agents aren't the ones with any dog in the fight of the actual insurance companies dictating all the terms and conditions that you despise.
Posted on 7/3/24 at 10:28 am to HoustonGumbeauxGuy
quote:
We've had Lemonade since COVID
What do your beverage choices have to do with this?
I kid, I just looked up the company, odd name choice.
Posted on 7/3/24 at 10:29 am to HoustonGumbeauxGuy
whats your square footage?
Posted on 7/3/24 at 10:30 am to HoustonGumbeauxGuy
Insurance companies are not there for your benefit. They exist to make money. That is their motive. So, don’t get it twisted. They are out for themselves, not you. Once you accept this basic concept, it all makes more sense.
Posted on 7/3/24 at 10:31 am to HoustonGumbeauxGuy
How big is your house?
Run of the mill spec home type construction is around $150/sf around here. But when you start getting into bigger houses, the cost per sq ft usually ends up being higher because there's generally assumed to be more custom features or higher end finishes. So if your house is 3200-3500 sq ft, then the insurance company probably isn't being unreasonable with that $850k estimate.
And know that insurance companies would rather err a little on the high side than to err on the low side and risk getting sued when someone has a total loss and they can't rebuild it for what the company insured it for.
Run of the mill spec home type construction is around $150/sf around here. But when you start getting into bigger houses, the cost per sq ft usually ends up being higher because there's generally assumed to be more custom features or higher end finishes. So if your house is 3200-3500 sq ft, then the insurance company probably isn't being unreasonable with that $850k estimate.
And know that insurance companies would rather err a little on the high side than to err on the low side and risk getting sued when someone has a total loss and they can't rebuild it for what the company insured it for.
Posted on 7/3/24 at 10:33 am to Chad504boy
quote:
you acting like insurance companies are "THEY" that requires appraisals. stupid.
I guess I must be stupid because when I had to reinsure a few years ago, I was required to get an appraisal.
quote:
the agents aren't the ones with any dog in the fight of the actual insurance companies dictating
They are playing by those dictations. What are you supposed to do? Tell the agents to change the rules? The agents are representing the company that is paying them. No dog in the fight? Yeh, keep believing your own bullshite!
Posted on 7/3/24 at 10:37 am to Boudreaux35
quote:
I guess I must be stupid because when I had to reinsure a few years ago, I was required to get an appraisal.
Yep. You're stupid. Insurance companies do not require true appraisals. Replacement Cost Estimators are used. Simple formulas in insurance company systems that generate coverage values based on some common home data.
quote:
They are playing by those dictations.
There's no choice in the matter.
quote:
What are you supposed to do? Tell the agents to change the rules? The agents are representing the company that is paying them. No dog in the fight? Yeh, keep believing your own bullshite!
I hope this tantrum makes you feel better. Insurance companies have more pull and power over agents than EVER before. Agents are pawns these days. Insurance companies dictate everything.
Posted on 7/3/24 at 11:16 am to HoustonGumbeauxGuy
It sure is easy to spot the insurance agents, or family members of insurance agents in this thread. frick those bastards. Every last one of them.
Posted on 7/3/24 at 11:30 am to Boudreaux35
quote:Insurance companies dont give a crap about your appraised value, they don't care about your market value, they do not care about your land or land value
You pay for a "dwelling value" that is 40%+ over the appraisal they require. Then, when you file a claim, they lowball you on the cost to repair/rebuild.
They strictly care about rebuild cost, there is a section of your appraisal that is more indicative of what the home should be insured for. It is under the Cost-Approach to value section and says "total estimate of cost new"
Some companies will have highly over valued costestimators and some will be more in line with expectations but most are inflated right now.
Also the companies are not running their costestimators on the fact that you can get your contractor buddy to rebuild your home for $130 a square foot if need be
quote:Insurance agents are just plugging in the info you give them into a program of the actual insurance carrier and that program is spitting out a valuation and the insurance agent is the required to quote it at that coverage amount. Most insurance agents hate the inflated costestimators for two reasons 1) They have to explain why the valuation is what it is continually even if they disagree with the valuation 2) It raises the premium which makes it harder to make the sale (especially if it is not a new purchase and they are trying to beat a competitor's premiums)
If you are an insurance agent, I about 0.5% more respect for you than I do far a Fla Blvd used car salesman.
Essentially the agent only has control over supplemental coverages, deductibles, and endorsements when quoting (Those are limited by individual carriers as well to an extent).
This post was edited on 7/3/24 at 4:32 pm
Posted on 7/3/24 at 11:30 am to Hold That Tiger 10
quote:
frick those bastards. Every last one of them.
we don't have anything to do with rates, insurance companies insolvency, underwriting guidelines nor claims handling or determinations. frick THE AGENTS!!!!!!!!!!!MURRRRRRRRRRRRRR 
Posted on 7/3/24 at 11:35 am to HoustonGumbeauxGuy
Don't forget!!!
Louisiana's POS senators and representatives in DC are more concerned with sending billions to Ukraine, rather than working on our insurance problems.
Louisiana's POS senators and representatives in DC are more concerned with sending billions to Ukraine, rather than working on our insurance problems.
Posted on 7/3/24 at 11:46 am to Hold That Tiger 10
quote:
It sure is easy to spot the insurance agents, or family members of insurance agents in this thread. frick those bastards. Every last one of them.
It's also very easy to see you throwing a tantrum about something you don't understand. Do you yell at the cashier at the gas station for the gas prices too?
Posted on 7/3/24 at 11:50 am to HoustonGumbeauxGuy
But But , insurance companies are regulated.
By insurance commissioners that they buy and pay for.
By insurance commissioners that they buy and pay for.
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