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Message
re: Homeowner's insurance quotes - grossly overestimating value of a rebuild
Posted on 7/4/24 at 6:52 am to HoustonGumbeauxGuy
Posted on 7/4/24 at 6:52 am to HoustonGumbeauxGuy
I should probably know this, but wouldn’t most people simply buy an existing home rather than rebuild in the event of a total loss?
With USAA, if you do an online quote you can set the rebuild cost to whatever you want (at least you used to be). I set it to something around market because we’re not waiting 3-4 months for a rebuild when we can buy in the area in a few weeks.
With USAA, if you do an online quote you can set the rebuild cost to whatever you want (at least you used to be). I set it to something around market because we’re not waiting 3-4 months for a rebuild when we can buy in the area in a few weeks.
0
Posted on 7/4/24 at 7:07 am to Tiger Prawn
quote:
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.
It kind of does seem unreasonable.
3500 x 150 = 525K
Your not paying for the lot and likely not paying for the foundation so there should be a reduction of cost per square foot, right?
I’m not aware that custom features are included when making a determination about the amount of coverage.
My house is valued much higher than the insured amount and has a lot of high end custom features.
Posted on 7/4/24 at 7:56 am to cyarrr
quote:
I’m not aware that custom features are included when making a determination about the amount of coverage.
They are, it’s called a replacement cost estimator and every company requires them to be run and attached to the app.
Posted on 7/4/24 at 8:11 am to HoustonGumbeauxGuy
They over insure to increase the cost of deductible when the deductible is a percent of the coverage amount. 2% of $850k is a lot more than 2% of 600k
Posted on 7/4/24 at 8:16 am to wickowick
quote:
They over insure to increase the cost of deductible when the deductible is a percent of the coverage amount. 2% of $850k is a lot more than 2% of 600k
This is what I was thinking about. If you are insured for $800k with 2% deductible $16K and let’s say it costs $600K to rebuild- should be a deductible return of $4k
Posted on 7/4/24 at 8:27 am to KemoSabe65
quote:
They are, it’s called a replacement cost estimator and every company requires them to be run and attached to the app.
But to the amount of 300k as was suggested by the previous poster?
Also, not to your point, but if identical houses are built. One house is located in Ascension parish, the other is 3 miles away in East Baton Rouge. The price of the house in EBR is significantly higher than the Ascension house due to location but the amount mortgaged is the same.
Is the cost of insurance higher for the house in EBR or equal considering building materials and labor costs are the same?
Posted on 7/4/24 at 8:40 am to OBReb6
What are you waiting for big boy? Why not take out your faux rage now? fricking clown
Posted on 7/4/24 at 8:41 am to cyarrr
Market value has little to do with replacement cost.
Posted on 7/4/24 at 8:42 am to wickowick
quote:
They over insure to increase the cost of deductible when the deductible is a percent of the coverage amount. 2% of $850k is a lot more than 2% of 600k
Complete and total bullshite, but kudos for the confidence. Everything isn’t a conspiracy to frick you over.
Posted on 7/4/24 at 8:53 am to Tiger Prawn
quote:
Run of the mill spec home type construction is around $150/sf around here
In Haiti?
Posted on 7/4/24 at 9:15 am to Strannix
Everyone’s an expert and everything’s a scam
This post was edited on 7/4/24 at 9:16 am
Posted on 7/4/24 at 9:21 am to DCtiger1
quote:
Market value has little to do with replacement cost.
Was thinking the same. I asked because the quoted amount of insured coverage for OP’s house is more than four times of what he purchased the house for in 2016.
Inflation is bad, but I can’t image cost of materials and labor has tripled in 8 years.
Posted on 7/4/24 at 9:37 am to Dog Tree
quote:
Louisiana's POS senators and representatives in DC are more concerned with sending billions to Ukraine, rather than working on our insurance problems.
Most of rating is dictated by state regulations. Blame your state officials.
I'm in IT for an insurance company so I have no bearing on prices but I do see why things are priced the way they are. Of course a company is in business to make money, if a particular segment or demographic is losing money, the company doesn't want to sell that. States do not allow insurance companies to just say, no we don't want to insure you. They do allow you to price them out though.
Posted on 7/4/24 at 11:45 am to Chad504boy
quote:
Until there’s a claim. Where do these people come from
Some us “people” have handled more than 15,000 claims. Depreciation is nothing more than factoring a percentage of the value of your personal property based on its age against the original cost. The insurer has no idea what you paid or how old the items are and rely on the information you provide. Get it yet? And most HO3 policies pay RCV without the endorsement if you actually replace the items. But you guys keep paying for that RCV coverage. Insurance companies absolutely love that.
Posted on 7/4/24 at 12:38 pm to LSU82BILL
quote:
The insurer has no idea what you paid or how old the items are and rely on the information you provide. Get it yet?
You’re shitting on insurance companies while encouraging fraud. Typical trash
Posted on 7/4/24 at 1:15 pm to Chad504boy
quote:
we don't have anything to do with rates, insurance companies insolvency, underwriting guidelines nor claims handling or determinations
What's your value to the homeowner?
Posted on 7/4/24 at 2:01 pm to moneyg
To make sure you’re properly covered and there aren’t any gaps, to make sure you’re educated on how every single aspect of the policies work, and to step in when you need help with claims or underwriting.
Answer me this, what’s your liability coverage amounts on your auto policy?
Answer me this, what’s your liability coverage amounts on your auto policy?
Posted on 7/4/24 at 2:03 pm to DCtiger1
quote:
You’re shitting on insurance companies while encouraging fraud. Typical trash
I’m not the one bitching about the cost of a premium or the amount of coverage being forced on me. I’ve never filed a claim for personal property. I’m just telling you how paying extra for RCV is stupid - especially if you plan to replace damaged personal property you lost.
Posted on 7/4/24 at 2:04 pm to HoustonGumbeauxGuy
quote:
FYI, we paid 255k for our home 8 years ago, it was built in 1991.
Market Value is not the same a Replacement Cost.
It will cost significantly more to rebuild a home following at claim.
Posted on 7/4/24 at 2:06 pm to jrodLSUke
quote:
Market Value is not the same a Replacement Cost. It will cost significantly more to rebuild a home following at claim.
You’d be better off going outside and yelling at the sky than trying to explain that to this group.
This post was edited on 7/4/24 at 2:07 pm
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