House insurance assessed at high value and resulting high premiums

by Frank

My home has a market value of approx. $1.3M-$1.4M.

We paid 1.25M 4 yrs ago. The house is 35yrs old.
The 3 acre ravine lot property that its on (land) has a value of not less than $800,000. A lot in the neighborhood 1/2 the size and exposed is listing for nearly $800K.
Not considering that the house is made of concrete and steel (not particularly flammable), my insurance company has assessed the rebuild cost at $2.4M + $480K for Other Permanent structures (assuming pool area)+ $1.2M contents.
The house is approx 3000sqft.
For 1/2 this amount I would be happy to turn over the house and its contents to the insurance company (or anyone else for that matter).

2yrs ago I switched insurance companies for this reason - but the newer insurance company uses similar rules.
I have partially reduced my premiums by having a high deductible.

Needless to say I am not happy with this distorted arrangement.

At $200/sqft I can have a better structure with better finishes that I have in my older home.
I am getting assessed for not less than $800/sqft.
To tear down a burned out home just does not cost $600/sqft - the whole thing is absurd.

I want to be insured for a realistic rebuilding cost. I will sign a waiver for the lower amount to free the insurance company for further obligations.

Any suggestions ?

Regards,
Frank

Rebuilding Value


Hi Frank
I understand your frustration. I'd be surprised if you found a carrier willing to do what you suggest.

Home Insurance claims have a tendency to be much higher than building costs for new homes. There is usually partial demolition, issues with neighbours, landscaping to deal with, finding trades on short notice, paying higher prices to get the job done right, paying higher prices to get the right replacement materials and so on.

I am sure this doesn't convince you or make you feel better, but I hope it helps a bit.


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Note: Always speak with a licensed insurance professional about your specific situation. This insurance information is general in nature and the policy wordings always take precedence. It is possible that there are errors and omissions in this website and www.canada-insurance-source.com, or its authors, take no responsibility.

Keep in mind that insurance licensing, legislation, and policies often vary by province and most certainly by country. Canada Insurance Source is a free information source. So use this site to gain a general understanding of insurance with your own area and situation in mind.  Make sure you review the "please read" page. Always speak with a licensed insurance professional about your specific situation.

Always speak with a licensed insurance representative about your specific situation.

This site is general in nature and there may be errors or ommissions

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