[Bob45]

I was checking my homeowners insurance. It looks like my home, a CYV, is covered for about 60K more than the new ones of the same sq. footage are listed for. I have a pool and bird cage that increases the value, but the lot is included in the price of the new ones. So, I guess my question is, How do I find out what my replacement cost would be if my house was leveled by a storm or it burnt to the ground? I think I am paying too much.

Thanks,
Bob

[rhredd1654]

You might want to question your agent. I had the same problem with property "up north" that I have for sale. I had him reduce the "replacement value". Doesn't make sense to insure it for more than the open market price.

[villages07]

Yep, I think that happens the longer you own the home. They have an automatic inflation adjustment clause so it keeps going up....which is not good if you bought at one of the peaks of the market. I mildly questioned that last year but the agent seemed to poo poo it. I think I will pursue it this year.

Would like to hear from some of our insurance industry experts on this one.

[Bobcuse]

I asked my insurance agent about this last year and was told that the cost to replace your home would be much higher than the original cost because these contractors that built your home are NOT the contactors who would rebuild it. These contactors are buying everything individually and don't get the huge volume discounts that the Villages contactors get. I recall watching a neighbor's home being replaced after being destroyed by a lightening fire, and it took almost a full year to completely replace that home. It was unbelievable but we are used to a new home being completed in 90 days or less, but the replacement business is much more expensive. So I decided to leave it alone rather than save a few dollars by reducing the insured value.

[784caroline]

An insurance company is NOT going to pay you more than what the house is worth. They really dont care what you or I paid for a house its all based on the model home, style, things like designer kitchens or high priced add ons and Primarily Square Footage.

It is just like you insuring a Diamond ring and you paid $3000 for it..you get an appraisal for $6000. Do you insure it for $3K or $6K??? Believe it or not the price you paid or the appraisal price in particular is irrevlant..what is critical is the description of the item being insured (ie 1.10 carat D color VVSi Clarity as wel as the setting being 14K or 18K etc). MOst likely the insurance company will give you the going price for that description or if that would not satisfy you give you a new ring that fits the description. If you lost the ring and you insured at $6K you most likely are above the insurance offereing..but in all likelihood you will be getting the wholesale value of the description that is less than $3K

Bottom line: When it comes to home insurance, a good insurance company/agent should be able to provide you a replacement cost formula for your house that is tailored to the specific geographic area....and he or she should be able and willing to help you fill it out. The insurable value all comes down to a cost per Square Foot of the building being insured (no land cost) plus any extras identified in the description. An Insurable value is much different than an appraised value of your property.

[eremite06]

When I was an appraiser I used Marshall & Swift manuals to obtain replacement values through the cost approach.

[GatorFan]

627.702 - Valued policy law. - 2011 Florida Statutes - The Florida Senate

[Bob45]

I went to see my insurance agent this morning. She recalculated my replacement cost and found it to be 24K lower than what I was being charged for. That will save me $90 on my premium.

Also I was told that sinkhole coverage will only cover the house. If you have one in your yard it is not covered.

And she said the "sinkhole" in Sunset Point was not a sinkhole. It was called a ground catastrophy. (sp) And that is covered by your regular coverage, not sinkhole coverage.

Bob

[batman911]

Another thing to keep in mind is that you could not re-build your home as cheaply as the developer built it because of quantity and other efficiencies the developer enjoys.

[rubicon]

To the OP...the best advice you received is to call your agent and come to anagreement on replacement value.

Keep in mind that replacement value is not the appraised value or the origi nal selling price. Also the home has to be rebuilt in order for the insurance company to pay the replacement value.

[Golfer in Sanibel]

Also, when you have your home replaced, there is a large cost factor for tearing down the existing structure and hauling the debris away. As said before, the contractors are different. They won't be purchasing their supplies in bulk. So, replacing the home is more expensive than building new. Good to know you saved money on the insurance.

[Carla B]

Insurance companies really confuse me. Last year when ASI raised our sinkhole premium I contacted another agent for a quote. She quoted two underwriters, one of them ASI. Based upon our address ASI would only insure us for $_____, which was $70,000 less than they (ASI) are insuring us for currently with our original agent. It will be interesting to see how it changes this year in July.