I just wanna make sure that I have enough home insurance. How do I know if my home is underinsured?
Total Comments: 9
Posted: Fri Jul 10, 2009 11:28 am Post Subject:
Hello Annmarie, and welcome to the community.
How do I know if my home is underinsured?
The best way would be to discuss this with your agent. Your home would need to be insured for the amount you paid for it minimally. Your mortgage company would require this. It will also depend on which homeowners policy you have. Some HO policys have guarantee rebuilding of the dwelling. Some, (mine :x ) go up every year. And you can't stop that limit increase....What is your home insured for? What did you pay for your home? How long have you lived there? Could you buy another home of equal value for what your dwelling limit is?
Posted: Thu Jul 16, 2009 07:54 pm Post Subject:
Thanks Lori, asking your agent is the only right answer to the OP's question. However....
Could you buy another home of equal value for what your dwelling limit is?
This doesn't really have anything to do with having enough coverage Lori. The idea of a homeowner policy is to repair or rebuild a damaged or destroyed dwelling. Sure you could opt for ACV settlement (minus coinsurance penalty) but you can't just walk away from a vacant lot filled with debris in most cities/towns, so you'd have to pay for debris removal and any other required environmental mitigation out of pocket.(insurance won't do this in an underinsured ACV settlement)
Also, it's not unheard of for a non-total loss to cost more than the market value of the property to repair, especially in older houses where even the non-damaged parts would have to be brought up to code if a certain percentage is damaged.
Point is, being able to buy a new house for your coverage amount is not a good way to determine if you have enough coverage. Could you rebuild your house for your coverage limit is the right question.
Also, since you don't like the automatic increases on your policy, take your own advice. Call your agent, ask them to run a current reconstruction estimate and if it's lower than your covA limit, reduce your coverage. If you're over insured you'll save some money, if your underinsured you wont be anymore. And if your agent refuses to do this for you, find a new agent.
Posted: Fri Jul 17, 2009 10:34 am Post Subject:
This doesn't really have anything to do with having enough coverage Lori. The idea of a homeowner policy is to repair or rebuild a damaged or destroyed dwelling
If your policy has a guaranteed rebuilding endorcement.
Also, since you don't like the automatic increases on your policy
I don't like it, and I would change it an ACV policy in a heart beat if I could..
take your own advice. Call your agent, ask them to run a current reconstruction estimate and if it's lower than your covA limit, reduce your coverage. If you're over insured you'll save some money, if your underinsured you wont be anymore. And if your agent refuses to do this for you, find a new agent.
I have of course, talked with my agent about it, that's how I knew we couldn't stop it. It's not my agents fault it is company policy. And yes, I asked three different agents that sell for other carriers if their HO3's were manditory rebuild, with increased limits/premiums every year and they are the same (Shelter, American Family, Nationwide, Allstate)
Posted: Fri Jul 17, 2009 02:29 pm Post Subject:
There's no such thing as a "guaranteed" rebuilding endorsement. Explanded replacement cost is always limited, generally to 125% or 150% of coverage A and will require 100% insurance to value. (meaning 100% of reconstruction cost not market value) So I maintain that if you are insured to market value you are 99.9% likely to be underinsured if you ever need your coverage.
And I was not suggesting that your agent could make the company discontinue inflation guard (the hated automatic increase) Only that they shouldn't force you to carry more than 100% of a current reconstruction cost estimate. If they refuse to run a current estimate and adjust your coverage acordingly they are just being lazy. Another part of your problem may be dealing with national companies. You'd likely get better service and more options with an independent agent who writes for mid-sized regional companies.
Posted: Sat Jul 18, 2009 01:19 pm Post Subject:
Yeah, my home is covered for the amount I paid for it initially and I've lived here for the past 19 years. A few days back I came to know of a countryside house (that belongs to an old colleague) that was renewed for more. Though my agent thinks it's fine with me now, I'm scared of damages.
Posted: Sun Jul 19, 2009 01:04 pm Post Subject:
Yeah, my home is covered for the amount I paid for it initially and I've lived here for the past 19 years.
Ann, unless you got one heck of a deal 19 years ago, you surely MUST be underinsured. If I'm understanding you. You are saying that the limit on your dwelling is STILL the amount you paid 19years ago? What do you think it would cost to replace your home and belongings? Same as it cost you 19years ago?
Posted: Mon May 09, 2011 03:10 am Post Subject: nJDXbCfGUbgqshtzGAu
Underinsured.. He-he-he :)
Posted: Fri Jun 03, 2011 07:36 am Post Subject: aeGFxnKTmashSp
Underinsured.. Nice :)
Posted: Tue Aug 23, 2011 08:04 am Post Subject: ULbamnaWtvFhGaPdMAI
Posted: Fri Jul 10, 2009 11:28 am Post Subject:
Hello Annmarie, and welcome to the community.
How do I know if my home is underinsured?
The best way would be to discuss this with your agent. Your home would need to be insured for the amount you paid for it minimally. Your mortgage company would require this. It will also depend on which homeowners policy you have. Some HO policys have guarantee rebuilding of the dwelling. Some, (mine :x ) go up every year. And you can't stop that limit increase....What is your home insured for? What did you pay for your home? How long have you lived there? Could you buy another home of equal value for what your dwelling limit is?Posted: Thu Jul 16, 2009 07:54 pm Post Subject:
Thanks Lori, asking your agent is the only right answer to the OP's question. However....
Could you buy another home of equal value for what your dwelling limit is?
This doesn't really have anything to do with having enough coverage Lori. The idea of a homeowner policy is to repair or rebuild a damaged or destroyed dwelling. Sure you could opt for ACV settlement (minus coinsurance penalty) but you can't just walk away from a vacant lot filled with debris in most cities/towns, so you'd have to pay for debris removal and any other required environmental mitigation out of pocket.(insurance won't do this in an underinsured ACV settlement)
Also, it's not unheard of for a non-total loss to cost more than the market value of the property to repair, especially in older houses where even the non-damaged parts would have to be brought up to code if a certain percentage is damaged.
Point is, being able to buy a new house for your coverage amount is not a good way to determine if you have enough coverage. Could you rebuild your house for your coverage limit is the right question.
Also, since you don't like the automatic increases on your policy, take your own advice. Call your agent, ask them to run a current reconstruction estimate and if it's lower than your covA limit, reduce your coverage. If you're over insured you'll save some money, if your underinsured you wont be anymore. And if your agent refuses to do this for you, find a new agent.
Posted: Fri Jul 17, 2009 10:34 am Post Subject:
This doesn't really have anything to do with having enough coverage Lori. The idea of a homeowner policy is to repair or rebuild a damaged or destroyed dwelling
If your policy has a guaranteed rebuilding endorcement.Also, since you don't like the automatic increases on your policy
I don't like it, and I would change it an ACV policy in a heart beat if I could..take your own advice. Call your agent, ask them to run a current reconstruction estimate and if it's lower than your covA limit, reduce your coverage. If you're over insured you'll save some money, if your underinsured you wont be anymore. And if your agent refuses to do this for you, find a new agent.
I have of course, talked with my agent about it, that's how I knew we couldn't stop it. It's not my agents fault it is company policy. And yes, I asked three different agents that sell for other carriers if their HO3's were manditory rebuild, with increased limits/premiums every year and they are the same (Shelter, American Family, Nationwide, Allstate)Posted: Fri Jul 17, 2009 02:29 pm Post Subject:
There's no such thing as a "guaranteed" rebuilding endorsement. Explanded replacement cost is always limited, generally to 125% or 150% of coverage A and will require 100% insurance to value. (meaning 100% of reconstruction cost not market value) So I maintain that if you are insured to market value you are 99.9% likely to be underinsured if you ever need your coverage.
And I was not suggesting that your agent could make the company discontinue inflation guard (the hated automatic increase) Only that they shouldn't force you to carry more than 100% of a current reconstruction cost estimate. If they refuse to run a current estimate and adjust your coverage acordingly they are just being lazy. Another part of your problem may be dealing with national companies. You'd likely get better service and more options with an independent agent who writes for mid-sized regional companies.
Posted: Sat Jul 18, 2009 01:19 pm Post Subject:
Yeah, my home is covered for the amount I paid for it initially and I've lived here for the past 19 years. A few days back I came to know of a countryside house (that belongs to an old colleague) that was renewed for more. Though my agent thinks it's fine with me now, I'm scared of damages.
Posted: Sun Jul 19, 2009 01:04 pm Post Subject:
Yeah, my home is covered for the amount I paid for it initially and I've lived here for the past 19 years.
Ann, unless you got one heck of a deal 19 years ago, you surely MUST be underinsured. If I'm understanding you. You are saying that the limit on your dwelling is STILL the amount you paid 19years ago? What do you think it would cost to replace your home and belongings? Same as it cost you 19years ago?Posted: Mon May 09, 2011 03:10 am Post Subject: nJDXbCfGUbgqshtzGAu
Underinsured.. He-he-he :)
Posted: Fri Jun 03, 2011 07:36 am Post Subject: aeGFxnKTmashSp
Underinsured.. Nice :)
Posted: Tue Aug 23, 2011 08:04 am Post Subject: ULbamnaWtvFhGaPdMAI
Learinng a ton from these neat articles.
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