Home Insurance recommendations?

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I know there are going to be many factors that affect the pricing of home owners insurance. I was wondering if anyone had suggestions. My bank told me that his projection at the top of the scale would be $500/yr. He also told me USAA had the lowest rates. Well, the lowest they said they could go was $680. Without trying to get a quote from every company out there, I wondered what your thoughts were. (Of course going to be calling company car insurance is through for their quote).

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You weren't asked how much it's worth because the insurance company doesn't care about its fair market value. It cares a... (more)

geo123 (Aug. 20, 2013 @ 12:56p) |

anyone ever used a company called assurant for home owners experience?

kabukicho (Oct. 09, 2013 @ 12:50a) |

I have started pricing insurance because frankly I think it is like cable TV, you get one quote and than they start ratc... (more)

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which state?

Home Insurance recommendations?

I do recommend home insurance ... next question ?

I was paying like a grand for home owners insurance in hurricane Florida and like $300 in NY so what state makes a huge difference.

Lol..Sorry, this is Ohio.

Your state insurance department may rate shop for you
Google:
Premium Comparison Homeowners Insurance site:.gov
...
Add OH

I've found the best home insurance rates have been from companies who you can't get a quote from directly, only from an independent broker. Contact a local insurance agent.

Wow that is low. I should get some new quotes.

I bought my house about 2 years ago for $265k. Its worth between $265k-$300k now if I had to ball park it based on comps.

I just changed homeowners insurance last month. Have been with State Farm and they were competitive. AAA was the same as Statefarm.

Geico was $200 cheaper a year however they source the policy to a unknown company and that scares me.

USAA said rebuild costs would be $450k and would only issue me a $450k policy. The costs were significantly higher.

Ended up going with Liberty Mutual who was slightly cheaper then everyone else.

Up front disclaimer: I own a property/casualty adjustment firm that covers the Mid-Atlantic states and represent 16 different companies, both small regional mutuals and extremely large quasi-captive companies. My wife is the regional marketing director for a small regional mutual and knows the market place very well. Neither of us sell insurance and have no vested interests in these recommendations:

Ohio is a robust market with lots of solid carriers, in fact quite a few of the big boys are domiciled (headquartered) in OH. Think Nationwide, State Auto, Progressive, Westfield, Grange, etc. Ohio doesn't have any particularly unusual loss exposures (hurricanes, hail, earthquake,etc) and the insurance department is reasonable for both consumer and company. You have a lot of choices.

Regarding going to state departments of insurance to get competitive rates, that is impossible. I have no idea why state departments do that non-sense. Yes, they can post the base rates of each company for a certain rating class. However, they cannot take into consideration where your risk may fall in that spectrum, nor do they even attempt to address base rate deviations, endorsements, etc. It's really almost pointless information.

USAA is a direct writer over the phone/net for military and families of military. If you can find some casual connection to the military you can likely get a quote from them. They are well regarded for their claims handling. They do not have local agents. In my experience their rates are middle of the pack. Again, great service via phone or net.

Please note that they replacement cost of your home has absolutely NOTHING to do with market value. When USAA is stating rebuild costs are $450k, they may very well be. How many square feet is the home? Is this average construction or do you have higher end functions? Think about it. If your house burns to the ground you have removal costs, permits, contractors overhead and profit, ever increasing material and labor costs, etc. My house was appraised recently for $320,000 and when backing out $50,000 for land that means my home is "worth" $270,000. There is absolutely no way I could rebuild my home for less than $400,000. This is a very general, round about number assuming you are in Columbus type area, but figure around $110 per square foot for rebuilding. REMEMBER, there is a co-insurance penalty in the homeowners contract and if you do not meet the co-insurance requirements for replacement cost a loss settlement could get hammered and there is absolutely nothing you can do about it. Most companies require 90% insurance to value, however some are at 80% and some are at 100%. If anyone needs further clarification this concept let me know.

dobby10, makes an accurate statement imo. Find a local independent agent who represents some of the better carriers and get a quote from them. You should be looking for carriers that have national markets like Travelers, as well as your regional carriers such as State Auto and Grange (both very highly rated regional carriers). Yes, it generally behooves you to have your auto and home with the same carrier as you usually have 10-20% discount on both products when insured with the same company. In my eyes, it also makes you a more valuable customer to the carrier. Homeowners is not a profitable product for the vast majority of carriers and they really like seeing the auto account there, which is typically more profitable. This generally is no big deal, but lets say your mortgagee forgets to pay your escrowed homeowners premium and you are looking for retroactive reinstatement of your policy. Carriers tend to reinstate or be more accommodating to multi-line house holds.

What you want:
Coverage A Dwelling which is reflective of the demolish, debris removal and rebuilding of your property to the like kind and quality that it currently is. This will be higher than your market value (remember it's a buyers market and properties are generally discounted).
Coverage B Other Structures will by default be 10% of coverage A. This is your pools, fences, detached structures. The 10% is included in the base policy. You can increase this if needed.
Coverage C Contents will generally be 70% of A, though I have saw standard 50% and as high as 100% (rare). You can increase that if needed.
Coverage D Loss of use will generally be 20% of A. This is increased costs of living for rental property, increased mileage, food, etc should you be displaced from your home due to a covered loss.
Coverage E Medical Payments - meh. I don't sweat that. Generally $2,000. This is a small amount of your section II coverage that takes care of minor issues where liability is not necessarily disputed. Your aunt comes over and falls off a horse, breaks her arm and has $1,500 medical bills would be an example.
Coverage F Liability you want $500,000 unless you have an excess policy, in which case you want whatever limit they require (usually $300,000) to get the $1 mil + umbrella. This covers you for incidents in which you are negligent and caused damages. Example you assisted your aunt onto your horse, without a saddle, and the horse took off, she is now a quadrapalegic. She sues (rightfully) and the insurance company defends you and pays damages.

Form: You want an HO3 or HO5. HO3 is a package policy of property and liability coverages. It has replacement cost for your dwelling. It is actual cash value for contents. HO5 has replacement cost of contents built in.

Endorsements:
If you didn't opt for an HO5 you want to get replacement cost for your contents via endorsement to the HO3.
You want to take a look at your basement situation. Do you have a sump pump? Are you on a public sewer system? If yes, then get the most Water Backup of Sewers and Drains coverage that you can buy. A lot of companies only offer $10,000. Look at your mechanicals in your basement. HVAC, water heater, etc. Is your basement finished? If yes to those, and yes to sump/drain/sewer then get it. Period. This is the most common denial that we run across when folks don't have that endorsement.
Package endorsements: frequently carriers package endorsements (this package endorsement often includes the aforementioned water back up coverage and is an excellent way to increase the limit of water back up if you need to) that can be very valuable to almost useless. However, if there are valuable coverages in the package (such as water back up) it is usually close in price to the stand alone endorsement. Silly things like lock replacement if your keys are stolen, replacement of fire extinguishers, baby sitter liability coverage for your teen kid that may provide occasional services, liability coverage for your kid who delivers newspapers, etc.
Business on premises. If you have a business on premises be sure to address liability and property coverages. Typically a policy has a $2,000 limit for business property.
Be sure to address any unusual hazards you have present. This is where having a local agent, you can assess your risk, is really the correct play. Sure they are sales people getting paid by commission, but so are the telephone sales people located down in TX at USAA.

Re: Geico statement from WhiteGuy. You actually have some basis for that fear in my opinion. The company that they use does a lot of homeowners policies for "direct auto writers" such as Geico and Progressive. The company is called Homesite. http://www.homesite.com/about-homesite/index.htm Note Homesite was founded in 1997 so the track record is very limited. If you read their "About Us" where they are talking about distribution channels, etc they are talking about the direct auto writers. Remember earlier when I said homeowners is generally not a profitable product for insurance companies? This is why Geico and Progressives attempt at entry into the homeowners market was thwarted and they decided to partner with this start up. Homesite is a leveraged, equity financed (by Morgan Stanley) insurance start up. Their reserves, which companies typically build over years, are financed. Note, the goal of most insurance companies is to make a small few percent profit on underwriting income. Their bread and butter, is the interest profits from their reserves which they are required to hold to pay future claims. Note, Homesites "reserves" are financed. So how does Homesite make money on an unprofitable product line, given that they have no real owned assets to earn income from? I was approached to have my firm handle claims for Homesite in the Mid-Atlantic region. I was told by a high level manager that "their premiums are low, so their claims settlements have to be low". That is absurd. Their rates are not below market average, in fact they are often higher. You don't settle a claim with someone for less than it is worth because "rates are low". Again, absurd and frankly likely illegal. Needless to say, I passed on that contractor. The business simply isn't worth nickle and diming valued property owners. I also note that Homesite highlights their Demotech A Prime financial rating and waits until the very last sentence to mention they are A- rated with AM Best. No one in the insurance or finance industry looks twice at Demotech as AM Best is the gold standard. That A- with AM Best becomes a B+ because of underwriting losses, lack of capital, lack of reserves, poor market concentrations, whatever, and becomes a B+ you have major problems. MANY lenders will not accept any grade of B (or less) rated carriers as they are (likely rightfully) concerned about their future ability to pay claims.

USAA is the top rated Insurance Co and AAA is #2.

evmocas has covered this better than anyone else could. I believe Geico also offers homeowners policies through Traveler's, so maybe that's more reputable and worth checking into.

forbin4040 said:   USAA is the top rated Insurance Co and AAA is #2.

AAA is a fickle beast and is frequently better described as an insurance agency, rather than an insurance company. While AAA does in fact have actual insurance operations, most people who are "insured" with AAA are actually insured with other companies and AAA is actually just their insurance agent, much like any other local or national independent insurance agency.

For example, if I go to AAA website and try to get insurance in PA (the 5th largest insurance market in the US and 11th largest in the world) I am directed to a local AAA insurance agency.

Directly from the website that AAA directed me to:

"Unlike insurance companies, AAA can quote and sell policies from a variety of well-known insurance providers. That means we can search our preferred partners in order to find you the best combination of coverage and price." The verbiage of the first sentence trolls me.

So needless to say, the JD Power rankings are completely and totally unreliable in that aspect, as they are not purely rating insurance companies, as a large percentage of people "insured with AAA" are not in fact insured by AAA, rather they are insured with Travelers, The Hartford, Liberty Mutual Agency Markets, etc.

After weighing all the factors, we decided that Chubb was worth the 20% premium over State Farm or Allstate. Their CS is the best in the biz.

SADSADLife said:   After weighing all the factors, we decided that Chubb was worth the 20% premium over State Farm or Allstate. Their CS is the best in the biz.

Chubb was not only first, but only in class, for high relativity homes. Ace has really come on strong in the high value markets and is really giving Chubb a run for their money. My adjusters love handling claims for either of those companies as they do really take care of their clients.

I would venture that your premium for coverage is no where close to 20% higher than State Farm or Allstate, as those carriers simply don't/can't offer high net worth clients the services or coverages that Ace and Chubb provide. Note, that depending upon market, the minimum dwelling coverage for Chubb was traditionally over $1 million. Ace starts at $500,000 in most markets. This has caused Chubb to lower their required minimum coverage A. It is debated if this broadening of the market will impact their "white glove" service.

evmocas said:   forbin4040 said:   USAA is the top rated Insurance Co and AAA is #2.

AAA is a fickle beast and is frequently better described as an insurance agency, rather than an insurance company. While AAA does in fact have actual insurance operations, most people who are "insured" with AAA are actually insured with other companies and AAA is actually just their insurance agent, much like any other local or national independent insurance agency.

For example, if I go to AAA website and try to get insurance in PA (the 5th largest insurance market in the US and 11th largest in the world) I am directed to a local AAA insurance agency.

Directly from the website that AAA directed me to:

"Unlike insurance companies, AAA can quote and sell policies from a variety of well-known insurance providers. That means we can search our preferred partners in order to find you the best combination of coverage and price." The verbiage of the first sentence trolls me.

So needless to say, the JD Power rankings are completely and totally unreliable in that aspect, as they are not purely rating insurance companies, as a large percentage of people "insured with AAA" are not in fact insured by AAA, rather they are insured with Travelers, The Hartford, Liberty Mutual Agency Markets, etc.

Good analysis.

I would imagine that the JD Power rankings are more focused on the people actually insured by AAA though. It's likely that the people who purchase a Liberty Mutual policy through AAA provide rankings for Liberty Mutual rather than for AAA.

This is a very common practice - Nationwide agents as an example can also quote other carriers when Nationwide itself doesn't offer coverage in unique circumstances. It doesn't mean that Nationwide's scores are unusable, it just means that their scores probably reflect more on the policies they created rather than the ones they issued for other carriers.

ankitgu said:   
Good analysis.

I would imagine that the JD Power rankings are more focused on the people actually insured by AAA though. It's likely that the people who purchase a Liberty Mutual policy through AAA provide rankings for Liberty Mutual rather than for AAA.

This is a very common practice - Nationwide agents as an example can also quote other carriers when Nationwide itself doesn't offer coverage in unique circumstances. It doesn't mean that Nationwide's scores are unusable, it just means that their scores probably reflect more on the policies they created rather than the ones they issued for other carriers.


Ya, it's a pretty good question. One would think that they quantified that aspect. The only reason I mention AAA is that 1) someone mentioned their rankings and 2) AAA doesn't even offer it's own insurance products in many markets. You are correct that "captive" Nationwide agents are now using Nationwide approved markets for risks. The general rule is that the Nationwide agent must first quote the risk through Nationwide and if the quote is terribly non-competitive they are allowed to use the alternate markets. It was a pretty smart move by Nationwide, given their deteriorating results in some of their prime markets such as PA, OH and NC. They are using the power of their marketing to drive customers to the Nationwide agent who then has a better shot at placing the business with someone. Nationwide is getting a very nice commission on the business and the company underwriting the business assumes all the risk and claim payment. Nice profit center.

evmocas said:   SADSADLife said:   After weighing all the factors, we decided that Chubb was worth the 20% premium over State Farm or Allstate. Their CS is the best in the biz.

Chubb was not only first, but only in class, for high relativity homes. Ace has really come on strong in the high value markets and is really giving Chubb a run for their money. My adjusters love handling claims for either of those companies as they do really take care of their clients.

I would venture that your premium for coverage is no where close to 20% higher than State Farm or Allstate, as those carriers simply don't/can't offer high net worth clients the services or coverages that Ace and Chubb provide. Note, that depending upon market, the minimum dwelling coverage for Chubb was traditionally over $1 million. Ace starts at $500,000 in most markets. This has caused Chubb to lower their required minimum coverage A. It is debated if this broadening of the market will impact their "white glove" service.


Thanks for the info! I certainly did not know that and Your inside info definitely gives my family and me more peace of mind in case we ever suffer a loss.

Closing a coop in nyc this week; is home insurance very important, and if so anyone you'd recommend for nyc?

I am in the market for home insurance and so far, Geico and USAA (they both route me to Liberty Mutual), State Farm, Amica cannot beat Costco's Ameriprise which went up for me this year.

Not AAA

Edit: posted before seeing all the discussion of AAA above. My reasoning is that here in MI AAA denied a hail damage roof claim when there was obvious hail damage, and found bullshit excuses for it. Roofing companies confirmed that AAA is one of the worst for it (out here at least). I'm still planning to switch when I stop being lazy about it, and cannot recommend AAA to anyone because if you're not going to pay out a legitimate claim then there's no point to insurance. Doesn't help that they pull similar BS on car insurance.

USAA on the other hand has a good reputation, and I can back it up with my neighbors experience (zero hassle claim). Too bad I'm not eligible

Sorry about being somewhat ranty, but I feel it's important information to someone considering homeowners insurance.

Ask your friends, check the Yellow Pages or contact your state insurance department. It could save you a good sum of money. National Association of Insurance Commissioners has information to help you choose an insurer in your state, including complaints.

evmocas said:   SADSADLife said:   After weighing all the factors, we decided that Chubb was worth the 20% premium over State Farm or Allstate. Their CS is the best in the biz.

Chubb was not only first, but only in class, for high relativity homes. Ace has really come on strong in the high value markets and is really giving Chubb a run for their money. My adjusters love handling claims for either of those companies as they do really take care of their clients.

I would venture that your premium for coverage is no where close to 20% higher than State Farm or Allstate, as those carriers simply don't/can't offer high net worth clients the services or coverages that Ace and Chubb provide. Note, that depending upon market, the minimum dwelling coverage for Chubb was traditionally over $1 million. Ace starts at $500,000 in most markets. This has caused Chubb to lower their required minimum coverage A. It is debated if this broadening of the market will impact their "white glove" service.
When it comes to high value homes, the rules for insurance shopping are a little bit different. For starters, many traditional companies do not offer high value homes insurance products. In our market, for instance, Ameriprise can't offer homeowners' insurance on houses with dwelling coverage over $750K. Safeco, a Liberty Mutual owned carrier, cannot issue policies on houses over, I believe, 5,000 sq. ft. (without the basement) that are over, I believe, $1MM in dwelling coverage. In other words, with high value homes your choice of insurers is more limited.

On the other hand, with high value homes it's easier to obtain more comprehensive coverage. Travelers' high value home coverage, for instance, automatically includes sewer and water backup coverage with no sublimit (with regular policies, you typically have to obtain a separate endorsement and your coverage, depending on the market, the endorsement and the carrier, will be limited to $10,000-$35,000), so you'll get full water and sewer backup coverage up to the full dwelling coverage of your home. Further, just like Chubb, Travelers' high value coverage includes a complete in-home appraisal at no additional cost -- this protects both the carrier as well as the insured, as this way all the unique features are noted and contents are detailed, which minimizes the likelihood of disputes down the road. Metlife's high value home coverage (Metlife is very selective: they don't write policies in every state and typically require all the policies to be with them; in states where it is permitted, they also require very high credit scores) also automatically includes unlimited guaranteed replacement coverage, which means that your home will be fully covered even if it turns out that the dwelling coverage calculations are too low or there's a mass disaster in the area that destroys a lot of homes, so that rebuilding costs spike up -- it used to be that other carriers offered this as an endorsement to their homeowners' policies but most have stopped doing it and now only offer extended replacement endorsements up to, depending on the state, the carrier and the endorsement, 10%, 25% or 50% over the dwelling coverage. Further, Metlife's GrandProtect coverage combines all the coverages in one policy (auto, homeowners', umbrella in one), which means one deductible (so, if there's something that damages your home and your cars parked there, you only pay one deductible -- with every other carrier, you'd pay a separate deductible on each policy). In other words, when it comes to high value homes, Chubb has formidable competition.

evmocas said:   ...JD Power rankings...Personally, I've always wondered what these JD Power insurance ratings really mean. For instance, it seems strange to rate carriers on their "pricing" for the reasons outlined in my post below.

I also don't understand why there's a separate "billing and payment" rating category. I've been with plenty of insurance companies and have never noticed any appreciable difference in the way that they bill or the payment methods that they accept.

The same is true for "contacting the insurer" -- they all have 24/7 claim reporting (which is all psychological, since an adjustor doesn't get assigned until later anyway), all have reasonably knowledgable CSR's, etc...

The "policy offering" category is also strange. For instance, Chubb is given only 3 stars in that category even though it offers the types of policies and the types of language that's not offered by many other insurers.

So, to me, the most important considerations (aside from the price, which is not something that you can realistically rate) is policy language (Chubb, for instance, includes an "agreed value" in its auto policies, so that in the event that the vehicle is totaled, you get the full agreed value; every other carrier pays out the "actual cash value" for the vehicle, which tends to be lower and typically causes a huge fight) and claims handling. Neither of those considerations are present in JD Power's survey. Hence, the reason that I'm not sure what purpose this JD Power survey serves, as personally, I'd much rather be with Chubb than with Amica. If you ask insurance experts, they'll generally tell you that these two aren't even in the same league.

People keep making the same mistake over and over again in thinking that the fact that an insurance company has offered a competitive quote to a person suggests that they should be competitive for them as well. It does not work like that and never has.

This is not to say that it's impossible to make some general observations regarding some of the companies and their business models. For instance, Esurance is a company that generally targets younger and less affluent clientele. Some of the other insurance companies that have been mentioned in other threads, such as Geico and Progressive, while being SUBSTANTIALLY larger, generally target higher risk non-standard drivers: young drivers, old drivers, drivers with a history of DUI's, accidents, etc... This generally means that their pricing structure is geared towards offering more advantageous terms to those. On the other hand, they tend not to handle the ultra-preferred market particularly well, which tends to be reflected by their pricing and product offerings (Esurance does not offer homeowners' insurance or umbrella -- they broker all homeowners' insurance quotes to Safeco and Security First and all umbrella insurance business goes elsewhere; Geico is an auto insurance company and also does not offer homeowners' policies -- they broker that business on to other companies).

If you fall in the ultra-preferred category, rather than the non-standard category that companies like Esurance, Geico and Progressive generally target, there tend to be much better companies both in terms of pricing and policy offerings. Liberty Mutual, for instance, tends to be very attractive to multi-car households with married drivers, homeowners, college education, high credit scores and excellent driving records (in some states some of this criteria doesn't apply or has limited applicability). Travelers is another carrier that tends to fall in this category -- there is a reason that it has captured a gigantic share of the umbrella insurance market out there. SafeCo, a Liberty Mutual owned company, tends to also appeal to this market segment. Esurance actually sends its homeowner's insurance business to SafeCo (and to Security First), which is kind of funny considering the fact that Esurance is owned by Allstate but SafeCo is owned by Liberty Mutual.

Then there's a company like Chubb, which tends to target the high end market (they offer policy provisions and features that other companies don't, which tend to be attractive for high end cars, expensive houses, etc...). Chubb's philosophy is that they'll never win if price is the only consideration but if you require a higher level of protection (at least in terms of their contractual features) than what can be offered by other companies, they can offer very attractive policies... they won't be cheap though.

Even the above generalizations, while accurate, tend to have lots and lots of exceptions. Some insurance companies are a lot more competitive in some states but not in others. It tends to get even more granular than that, as some companies are much more competitive in certain zip codes, tend to offer better pricing on certain types of cars, and just generally tend to emphasize certain specific factors.

Hence, the reason that all these posts saying "hey, I've got a great quote from company X; give them a try," while certainly well intentioned, are not going to do people any good.

geo123 said:   Hence, the reason that all these posts saying "hey, I've got a great quote from company X; give them a try," while certainly well intentioned, are not going to do people any good.I think where people's input would be useful (at least to someone like me) is in claims experience. Sure policy features are important too, but (based on my past negative experience) I think the most important factor to consider when buying insurance is whether they're going to try and find bullshit excuses to deny your claim. Having feature X or a slightly cheaper price is not much good if you have to deal with lawsuits, etc. to get your claim actually covered (or not covered at all if you're litigation-averse). I know when I stop being lazy and shop around again, that's going to be my primary consideration, not a few 100 dollars.

bump

I can recommend using an agent that reps multiple companies. Especially if your policy requirements are specialized.

Shopping home insurance for a property in Bay Area. I'm getting broad range for replacement cost quotes on a 3/2 1500 sq ft. 332,000 for replacement cost estimated from travelers - $1256 annual cost. 412,000 replacement cost estimated from Amica - $1705 annual cost. What other comparisons should I make to choose? Any thoughts?

Travelers quote:
Dwelling $ 332,000
Other Structures $ 33,200
Personal Property $ 232,400
Loss of Use $ 99,600
Personal Liability $ 300,000
Medical Payments $ 5,000
Deductible $ 2,500
Limited Fungi
Repl Cost Contents
Additional Repl Cost Prot (25%)
Workers Comp Res Empl $ 8.00



Amica Quote:
Dwelling $ 412,000
Other Structures $ 41,200
Personal Property $ 206,000
Loss of Use $ 123,600
Personal Liability $ 300,000
Medical Payments $ 5,000
Additional Dwelling Coverage (25% i believe)
Has some enhanced special limits for jewelry,etc
Water back up/sump pump
Credit card coverage $5000

fobber888 said:   Shopping home insurance for a property in Bay Area. I'm getting broad range for replacement cost quotes on a 3/2 1500 sq ft. 332,000 for replacement cost estimated from travelers - $1256 annual cost. 412,000 replacement cost estimated from Amica - $1705 annual cost. What other comparisons should I make to choose? Any thoughts?Since the two companies came up with different replacement cost estimates, there's a mistake somewhere. You need to call up agents and make sure that these calculations are being run in a consistent way, as the replacement cost numbers from be virtually identical company to company.

Other than that, I'm not sure what else you are asking. You just need to call up different carriers and get quotes. If you are getting an umbrella policy, you really ought to try to get your homeowner's, auto and umbrella from the same company. If you are not getting an umbrella, it's not that big of a deal but you should still get combined and individual quotes, as some companies will give very large mutli-policy discounts while others won't.

When I was shopping home owners insurance early this month I had replacement costs from $400-625k. Some companies would let you set your own replacement cost and others forced you to be locked into their estimate.
I'm in NJ, 2900 sqft home w/pool. Prices were $780-1600.
Travelers quoted $931 and Amica $1076. Contact a local broker. The best prices I got were from 2 different brokers.

Yes, I think the biggest question I'm asking is why would replacement costs be so different. I answered the application questions the same. I've gotten replacement costs ranging from 332k-412k and many in between.

I read in another FW thread that you should let the insurance companies set the replacement cost so i've not asked for a specific number for amount of coverage but with the wide range of estimates, not sure which to go with.

dobby10 said:   When I was shopping home owners insurance early this month I had replacement costs from $400-625k.Again, this only happens when the replacement cost calculator is run differently by different representatives. All insurance companies generally use the Marshall & Swift guide for these calculations, so you end up with wide variations in values because insurance reps are inputting different things into the calculator.

I have had situations where even after going through the inputs line by line I could not identify the reason for incorrect values, but that's fairly unusual. In general, I've always been able to identify the reason for the differences and to get them corrected.

The reason that this is so important is pretty self-evident -- you are not getting an accurate quote from a company that's using an inflated replacement cost calculator.

Some companies would let you set your own replacement costSure, for the preliminary quote. This saves time, as replacement cost calculations should be consistent carrier to carrier, so agents save time this way. I cannot imagine that there are carriers out there that will issue an actual policy without running their own replacement cost calculator.

I have one of those classic Bay Area 1920's craftsman houses. I am limited to carriers that do not exclude coverage for old skool Knob & Tube wiring. Berkeley Craftsmen laugh at me and wonder who in their right mind will rebuild my house @ even 150% of my coverage level. (quarter sawn oak, solid eucalyptus wood paneling and built-in furniture everywhere)

sesat said:   I have one of those classic Bay Area 1920's craftsman houses. I am limited to carriers that do not exclude coverage for old skool Knob & Tube wiring. Berkeley Craftsmen laugh at me and wonder who in their right mind will rebuild my house @ even 150% of my coverage level. (quarter sawn oak, solid eucalyptus wood paneling and built-in furniture everywhere)

Which carriers are those?

Lender is saying they need replacement costs to cover the loan amount. Carrier says they don't so that. Is this a typical situation? Looking to close in two days.

Are there any carriers who will let you name the replacement costs for the purposes of closing the loan?

fobber888 said:   Lender is saying they need replacement costs to cover the loan amount. Carrier says they don't so that. Is this a typical situation? Looking to close in two days.I don't understand what you are asking, nor do I understand the lender's request. Your homeowner's insurance policy covers the replacement value of your home and has nothing to do with the loan amount. If the primary value of the property is in the land, you can easily have a situation where the homeowner's insurance is lower than the loan amount and it's not a problem, since the entire property, including the land, serves as collateral for the loan.

Is it possible that you misunderstood the lender's request and the lender was saying that it wants its title insurance to cover the loan?

Are there any carriers who will let you name the replacement costs for the purposes of closing the loan?I'd be very surprised if there are any such carriers.

Again, I think that there's just massive miscommunication between you and the lender.

fobber888 said:   Lender is saying they need replacement costs to cover the loan amount. Carrier says they don't so that. Is this a typical situation? Looking to close in two days.

Are there any carriers who will let you name the replacement costs for the purposes of closing the loan?


If you are stating that the home needs to be over insured compared to the actual replacement cost in order to cover the loan amount, then I am certainly not aware of any such markets. In fact, I would suggest that most state departments of insurance would find this practice illegal as the carrier would be charging a premium and collecting money in exchange for a risk that does not exist.

If you have acreage, special water front location, ski resort area, whatever and your land is worth a significant amount, however the replacement cost of the dwelling itself is substantially less, then you are going to have a problem getting coverage for the land and house total value. Your lender should very well know this.

I've seen clueless escrow companies and lenders demand insurance policy limits equaling purchase price or loan amounts . They are 100% wrong but sometimes its easiest to just agree with them , get the deal closed , then adjust coverage after .

In the Bay Area I've seen $150k policies on a $600k purchase price with a $480k loan. The land has all the value here

SUCKISSTAPLES said:   I've seen clueless escrow companies and lenders demand insurance policy limits equaling purchase price or loan amounts . They are 100% wrong but sometimes its easiest to just agree with them , get the deal closed , then adjust coverage after .

In the Bay Area I've seen $150k policies on a $600k purchase price with a $480k loan. The land has all the value here


Be careful before adjusting the coverage down. We were in a similar situation with a condo and the requirement of such a high insurance value was written into the loan contract so we can't adjust it down (or switch insurers really because only Travelers was willing to do it).

Skipping 15 Messages...

Please note that they replacement cost of your home has absolutely NOTHING to do with market value. When USAA is stating rebuild costs are $450k, they may very well be. How many square feet is the home? Is this average construction or do you have higher end functions? Think about it. If your house burns to the ground you have removal costs, permits, contractors overhead and profit, ever increasing material and labor costs, etc. My house was appraised recently for $320,000 and when backing out $50,000 for land that means my home is "worth" $270,000. There is absolutely no way I could rebuild my home for less than $400,000. This is a very general, round about number assuming you are in Columbus type area, but figure around $110 per square foot for rebuilding. 

What you want:
Coverage A Dwelling which is reflective of the demolish, debris removal and rebuilding of your property to the like kind and quality that it currently is. This will be higher than your market value (remember it's a buyers market and properties are generally discounted).

called Homesite. http://www.homesite.com/about-homesite/index.htm      Note Homesite was founded in 1997 so the track record is very limited. If you read their "About Us" where they are talking about distribution channels, etc they are talking about the direct auto writers.  lenders will not accept any grade of B (or less) rated carriers as they are (likely rightfully) concerned about their future ability to pay claims.

  I have started pricing insurance because frankly I think it is like cable TV, you get one quote and than they start ratcheting it up every year until you go with another company.   I'm currently with Liberty Mutual but can't say too many good things about them.  When I had a tree fall on my roof, it took nearly 8 months to get the damage repaired.  Seemed like every month I was talking to a different person.  Meanwhile the damage was increasing!  Go Figure!

When comparing rates, I found Costco's backer Ameriprise to be the weirdest of the bunch I have talked to thus far.  The market value of this home is probably around $100,000 including the property.  However, even after subtracting the land value which is easily $10,000, Ameriprise was quoting me dwelling at $250,311!   I know the cost replacement value is higher than market value but that is a totally ridiculous figure.  I called them up and talked to a customer service rep because their numbers were so far off reality, I thought their software had a computer glitch!   This is Indiana, the replacement cost will be lower than many other states.  Perhaps they thought I lived in Hawaii.....

Speaking of which, for $250,000 it doesn't make sense to rebuild this home.  It would be easier to just buy a bigger, nicer house in a better neighborhood and then sell the remaining land.  Since I could do that, these figures aren't based in reality.  

Homesite, Progressive has high rates for homeowners insurance (they also tried to quote for $250,000 dwelling), the rates would reflect the fact that they are not a real company.  And, I think these companies are quoting dwelling this way because they just do not want to insure less - it's not based on real figures.



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