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Old 10-26-2015, 04:58 PM   #21
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Originally Posted by FUEGO View Post
Our insured value is about $123/sf even though the cost to buy the same house is $83/sf (and that includes the land cost - without land, the house would be ~$60/sf).

We also get 25% more than the stated coverage amount ($221k+25% IIRC) to cover clean up, site prep, cost overruns, and the fact that it's not being built in a tract home neighborhood.

I wish I could insure for less but that's a fight I've lost so far.
Although a similar house may sell for $60/sf, insurance must pay what it costs to rebuild, and not the current market value.
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Old 10-26-2015, 09:45 PM   #22
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Although a similar house may sell for $60/sf, insurance must pay what it costs to rebuild, and not the current market value.
I get it, but I watched brand new houses larger (and nicer, more modern) than mine pop up and sell for 10-20% less than my house is insured for. But I've shopped insurance companies and they all seem to use the same software to calculate reconstruction costs because the cost estimates are pretty consistent around $220k.

I just wish I could take the $220k, sell my lot, and buy two houses next door with the proceeds.
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Old 10-26-2015, 09:51 PM   #23
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You have to be careful with assumptions about basements and living areas. Different jurisdictions define the space differently and depending on the jurisdiction, there can be many variables. In my local county, you can have a partially finished basement and/or a living space basement. One of the variables that is used is the height of the ceiling and the material of the ceiling.

Sent from my mobile device so please excuse grammatical errors.
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Old 10-26-2015, 10:02 PM   #24
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I get it, but I watched brand new houses larger (and nicer, more modern) than mine pop up and sell for 10-20% less than my house is insured for. But I've shopped insurance companies and they all seem to use the same software to calculate reconstruction costs because the cost estimates are pretty consistent around $220k.

I just wish I could take the $220k, sell my lot, and buy two houses next door with the proceeds.
Now rebuilding costs also will depend on if the damage is localized to your house or a regional disaster such as a large tornado or a hurricane (since earthquakes are not covered by standard homeowners policies). If a regional disaster then building contractors and the like will be in short supply and fly by nighters will arrive. To ensure a good repair, you will have to pay a premium price for labor.
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Old 10-27-2015, 07:12 AM   #25
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I worked at getting my valuation down years ago.... I got it down to a point that the agent said that if I went any lower they would consider me as part self insuring...

I asked what that meant and he said.... if we deem you self insure 20%, then any claim we will only have to pay 80% of it and then take out deductible.... the difference in cost of the insurance was not worth me savings a few dollars for the potential loss....
I've run into this too. Since most claims are for partial losses with the lower coverage limit they are reducing the premium so there needs to be some mechanism to prevent people from self insuring for a portion of a total loss and getting 100% coverage on partial losses.
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