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Hi All,

I am looking to get some clarity and information about my situation below. There was a thread on the same topic last year but its closed so I am opening a new thread here.

I am currently in process of getting homeowner's insurance for my new home and I am getting very different rate quotes from various companies. They all mostly differ on dwelling coverage amount. I am providing some details below about my house and the quotes from 2 different insurance companies.

House details:

House zip code: 08859 (NJ)
Year built: 2003
Square footage: 2350
Purchase price: $393,000

Quote 1 - Universal North America Insurance Company

Coverage A: Dwelling $243,000
Additional Amount of Insurance for Coverage A - Dwelling: 25%
Coverage B: Other Structures $24,300
Coverage C: Unscheduled Personal Property $170,000
Coverage D: Loss of Use $97,200
Coverage E: Personal Liability $250,000
Coverage F: Medical Payments $2,000
Policy Deductible $1,000

Premium : $465.00/year

Quote 2 - Universal North America Insurance Company

Coverage A: Dwelling $325,000
Additional Amount of Insurance for Coverage A - Dwelling: 25%
Coverage B: Other Structures $32,500
Coverage C: Unscheduled Personal Property $227,500
Coverage D: Loss of Use $130,000
Coverage E: Personal Liability $300,000
Coverage F: Medical Payments $2,000
Policy Deductible $1,000

Premium : $592.00/year

Quote 3 - Narragansett Bay

Coverage A: Dwelling $393,000
Additional Amount of Insurance for Coverage A - Dwelling: 50%
Coverage B: Other Structures $39,300
Coverage C: Unscheduled Personal Property $294,750
Coverage D: Loss of Use $117,900
Coverage E: Personal Liability $500,000
Coverage F: Medical Payments $5,000
Policy Deductible $1,000

Premium : $842.00/year


As you can see they are all very different in terms of coverage and hence different premium amounts. I asked the agent about Dwelling coverage in Quote 1 and why it was low and he said that that's what it will take to rebuild same square footage home in my area. He also gave me 2nd quote for high dwelling coverage from same company if I wanted to go for that. Obviously with higher premium. Quote 3 from Narragansett Bay covers upto the purchase price of the house but very high premium.

There is also another line item which I am not sure if I am understanding it correctly - "Additional Amount of Insurance for Coverage A - Dwelling". Does this mean there is additional 25% or 50% coverage on dwelling if required?

In case if my home is damaged and needs to be replaced, would the insurance company from Quote 1 be responsible for rebuilding the home even if the dwelling coverage amount is less than actual cost to rebuild? I am just worried that they will come back and say that I will only get what I am covered for in the policy even though they quoted me the wrong dwelling amount.

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halcut007 said:   "Additional Amount of Insurance for Coverage A - Dwelling"
It might cover extra costs incurred to rebuild the same home to current code

halcut007 said:   and he said that that's what it will take to rebuild same square footage home in my areaIs $103 per SF to build and complete a new home in your area somewhat cheap ?

-

Just curious as to how this works out? Obviously your $393K purchase price includes land and house.

If your house burned to the ground you would still have the land to rebuild on and thus to put a new house back up may only cost $250K.
But is this how it works? Or do most people take their settlement and go buy another house somewhere else?

If you are going to rebuild on the same land - won't you have to tear down the remains of the existing structure to prep for build? How much does that cost?

The additional % is also called "extended replacement cost." I do not know enough about the coverage amounts to comment on that but I have a suggestion: If you have a car, consider getting homeowner's from the same company that you purchase your auto insurance from. My h.o. insurance is $580 a year but the multi-line discount I get on my 3 vehicles because of having the h.o. totals $496/year. My net cost for the homeowner's is only $84 a year.

What are some places to shop for homeowner's insurance -- are there any good estimate bundlers? Esurance?

Always let the insurer determine your coverage amounts , they use a computer program and you want to rely on that. The extended replacement cost will pay an additional 25 or 50% of the policy limit if your home is completely destroyed and the base amount of coverage A is insufficient .

These will not pay "whatever cost it takes" to rebuild - they will pay up to 125 or 150% of the policy limit and that's all. A policy that pays whatever it takes is called guaranteed replacement cost.

ltcm said:   What are some places to shop for homeowner's insurance -- are there any good estimate bundlers? Esurance?
Your state department of insurance likely has a premium
Comparison chart

xoneinax said:   halcut007 said:   and he said that that's what it will take to rebuild same square footage home in my areaIs $103 per SF to build and complete a new home in your area somewhat cheap ?

I have no idea what the going rate is in my area. I would think given that the foundation will most probably be intact, the cost would be just to build the house without it.

SUCKISSTAPLES said:   Always let the insurer determine your coverage amounts , they use a computer program and you want to rely on that. The extended replacement cost will pay an additional 25 or 50% of the policy limit if your home is completely destroyed and the base amount of coverage A is insufficient .

These will not pay "whatever cost it takes" to rebuild - they will pay up to 125 or 150% of the policy limit and that's all. A policy that pays whatever it takes is called guaranteed replacement cost.


That's what I want to go with and choose quote 1 (cheaper of all) and rely on the insurance company's determination on dwelling coverage. However as I mentioned I am worried that in case of rebuild and actual cost being more than what they determined, they would only cover the amount in policy. Can I make them liable for incorrectly determining dwelling amount?

taylor0987 said:   The additional % is also called "extended replacement cost." I do not know enough about the coverage amounts to comment on that but I have a suggestion: If you have a car, consider getting homeowner's from the same company that you purchase your auto insurance from. My h.o. insurance is $580 a year but the multi-line discount I get on my 3 vehicles because of having the h.o. totals $496/year. My net cost for the homeowner's is only $84 a year.

These quotes are actually from a Geico agent with whom I already have my auto insurance. Geico does not provide homeowner's insurance by themselves but uses third party insurance companies. They shop around on my behalf to get the best quote.

Yes that's why you want to let them suggest the coverage rather than you choosing the coverage

Keep in mind this becomes An issue when you sue your insurer for bad faith ,so if the 125% is insufficient count on a nice protracted legal battle

halcut007 said:   taylor0987 said:   The additional % is also called "extended replacement cost." I do not know enough about the coverage amounts to comment on that but I have a suggestion: If you have a car, consider getting homeowner's from the same company that you purchase your auto insurance from. My h.o. insurance is $580 a year but the multi-line discount I get on my 3 vehicles because of having the h.o. totals $496/year. My net cost for the homeowner's is only $84 a year.

These quotes are actually from a Geico agent with whom I already have my auto insurance. Geico does not provide homeowner's insurance by themselves but uses third party insurance companies. They shop around on my behalf to get the best quote.


Did you call Geico for these quotes? I have my auto with them as well and their website directed me to Liberty Mutual for a homeowner's quote, but did not give me an opportunity to compare it to anything else.

ltcm said:   
Did you call Geico for these quotes? I have my auto with them as well and their website directed me to Liberty Mutual for a homeowner's quote, but did not give me an opportunity to compare it to anything else.

I didn't go to their website but called and asked for quotes. Call them up ... they are nice to work with.

Do you have a copy of the appraisal on the property from when you bought the house? It may include calculations to determine the cost to rebuild. One of my recent appraisals ran those figures. If so then that gives you another independent reference on typical rebuild costs in your area for your house.

jerosen said:   Do you have a copy of the appraisal on the property from when you bought the house? It may include calculations to determine the cost to rebuild. One of my recent appraisals ran those figures. If so then that gives you another independent reference on typical rebuild costs in your area for your house.

Checked my appraisal report but it does not mention rebuilding cost.

halcut007 said:   ltcm said:   
Did you call Geico for these quotes? I have my auto with them as well and their website directed me to Liberty Mutual for a homeowner's quote, but did not give me an opportunity to compare it to anything else.

I didn't go to their website but called and asked for quotes. Call them up ... they are nice to work with.


Great advice, thanks. The agent said Liberty Mutual is the default online and that they're normally the cheapest, but not in this area. She was able to get me a new quote that was over $1000/year less than the LM one -- thanks for the tip.



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