re: Homeowner's insurance quotes - grossly overestimating value of a rebuild

What’s the square footage? What are new builds in the area going for/sq ft? If the price/sq ft is way out of whack, ask them about it.

The insurance company is contractually obligated to rebuild a house of similar construction materials and sq ft, so even if you don’t think it’s “worth” that much or “wouldn’t rebuild the same size” they have to insure it for enough to do that. Insurance companies are always going to be on the conservative side, bc even if at today costs it’s enough to rebuild, they have to consider inflation and skyrocketing prices after a major event. You can literally see costs of building prices, labor rates, and materials shoot up overnight after a major disaster. Then guess who you’re calling to bitch at when your coverage isn’t “enough.”

Huge issue in LA right now.

There's a formula / computer system they use. According to them, the cost to rebuild after a disaster, given how high materials and labor are now, basically means the cost to rebuild is much higher than the cost to sell the house we currently have.

I think there is some BS in here, but when there's only 2-3 companies selling insurance here, what are you gonna do?

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You are not insuring to replace

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What do you think "replacement cost" means?

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I understand anyone can sue anyone else, but this to me should be laughed out of court. You are not insuring to replace, you are insuring to a value. If you didn't ensure a high enough value, that's your fault, not the insurer's fault.

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I dont think it is quite that simple for home insurance. They are insuring the cost to rebuild and if you have a mortgage, there are probably all sorts of issues with not covering enough costs to rebuild exactly the same.

If you had no mortgage, it should be super easy to insure for only the cost you want to cover unless there is some verbiage in there for the insurance company to buy you out instead of rebuilding yourself.

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Isn't part of that insuring to a certain value also factoring in the replacement costs for a total loss, mitigation costs, the cost to rebuild/replace the exact house that was totaled under inflated material & labor costs, and also making sure the entire costs to do everything will fall within at least 80% of the total costs or the homeowner then gets hit with underinsured penalties.

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yes, insured's don't have an option to choose to underinsure themselves. The first X% layer of replacement cost value is obviously the most risky.

One of the few things that I can honestly say I hate in life are, insurance companies, and Latoya Cantrell.

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this is a legit question from a normal, middle class, hard-working American.

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What does this even mean? Every company uses Xactware. They aren’t purposely inflating anything. In fact, here on the coast that tool usually underestimates replacement cost.

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These threads always bring out the retards.

Muh insurance is a scam.

Muh agents are scum. .

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It’s always a scam until you recommend that they self insure.

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Everything is a scam when you’re uneducated

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May be the single best indicator of a dummy. That or buying lotto tickets....which of course is a scam

The estimated cost of Ida in Louisiana was $75 billion. The estimated cost of Laura was $10 billion. The Census says there’s 1.765 million households in Louisiana. many of those don’t own a home or pay home insurance, but let’s use that number for the math.

$85b/1.765m = $48,158 in cost per household in Louisiana, between 2 events over 2 years. That number isn’t exact and doesn’t really tell the whole story, but you start to get a sense of how much premium these companies would NEED to take in in order to make money in Louisiana. Not many scams are in it to lose money.

And that number is just for 2 events…Not counting Delta, Zeta, the freeze, the huge increase in hail claims, in addition to your normal day to day claims (water losses, fires, theft, trees falling, and the crazy amount of bullshite liability claims).

Insurance is not profitable in Louisiana and it’s one of the most regulated industries in Louisiana.