6 Thoughts on house insurance based on rebuild cost or assessed value?
  1. Reply
    Extra Hands
    June 25, 2011 at 8:02 pm

    after any item is placed into operation in a home it becomes “depriciated” this means that you will only get from the insurance a private party value. same as if you get a new car as soon as you drive off the lot its value dropped 15% because it has an owner and is no longer considered new.

  2. Reply
    mbrcatz
    June 25, 2011 at 8:18 pm

    Well, what kind of POLICY do you have? Do you have a market (assessed) value policy, or a replacement value policy?

    You base the coverage, on the policy TYPE. The standard policy, the HO3, is a REPLACEMENT policy.

    That means, if you have a kitchen fire, they pay to FIX it. On a market value policy, they do NOT pay to fix it, they give you a percentage of the decrease in value for your property, for your house.

    And, material costs in my neck of the woods have gone up dramatically over the past five years, and labor costs aren’t going down, either.

  3. Reply
    acermill
    June 25, 2011 at 8:32 pm

    Building materials are the same cost as they were a decade back ? Take a trip to Home Depot to check the prices of roofing, siding, cabinets and windows, and then get your eyes opened. If you want your house restored to the condition it was prior to any fire or damage, you need to pay a premium based upon those expected costs.

  4. Reply
    Mcgee
    June 25, 2011 at 8:36 pm

    You are being assessed “betterment”

    Betterment in the insurance industry is an adjustment to your overall payment for a specific item because it depreciates in value.

    Ex – Your vehicle tires were cut in a comprehensive loss. Because tires can only depreciate, your insurance carrier will deduct a certain percentage from the replacement cost based on how much the tire has depreciated.

  5. Reply
    jlf
    June 25, 2011 at 8:44 pm

    Building materials are NOT the only factor. If your house burns to the ground and has to be rebuilt, you’re talking architectural design, permitting, contracting (labor costs are NOT the “same”) and rebuild to CURRENT building codes – not the codes in effect at the time the current house was built. And it will be a custom single-house construction effort, not a large tract home project, so economy of scale is lost.

    It would be foolish NOT to take “replacement cost” coverage. The premium difference is small.

  6. Reply
    Victor
    June 25, 2011 at 9:34 pm

    You can easily check your quotes in internet, for example here – homeinsurance.awardspace.us

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