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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