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New insurance company and house grew 50%
Old 10-24-2015, 04:11 PM   #1
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New insurance company and house grew 50%

So I switched over to a new insurance company All-state and about a month after the date, they updated my insurance to say the replacement cost of my house went up for an extra $188.

My old ins company said it was 1,000 sq ft (as does zillow and I think the property tax statement). Now it is 1,574 sq ft.

I phoned the agent, he got back to me saying when they measured my house that's the value they got. I was told they would measure and they did make me fix a deck railing that was missing.

It's a split level, meaning you walk into the living-room via the front door.
From the living-room you can go up about 8 steps to the upper floor, or down the stairs to the semi-buried family room (under the upper floor).
From the semi-buried family room you can go down another 7 steps to the basement (its under the living room).

It has a double attached garage on the side of the house, no house behind the garage.

Is insurance supposed to count the unfinished basement as living space?
What about the semi-buried family room. It has no doors to the outside, but the windows are above the ground level.
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Old 10-24-2015, 04:25 PM   #2
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Does this mean in case of a catastrophic loss such as a fire they would build you a new 1574 sq ft house?
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Old 10-24-2015, 04:33 PM   #3
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Does this mean in case of a catastrophic loss such as a fire they would build you a new 1574 sq ft house?
Unfortunately no, otherwise I could take up smoking at nap time
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Old 10-24-2015, 04:49 PM   #4
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What does the property tax assessor say the square footage is? You might ask the insurance company to define what it means by living area also.

I would think that if the family room has wallboard and finish carpentry it would be living space at least.
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Old 10-24-2015, 09:07 PM   #5
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I was shopping for insurance with Allstate and they were substantially cheaper than other companies. I was glad to move my auto insurance after Met Life had outrageous premium increases.

Allstate sent an inspector out to physically inspect my house a week or two later. The inspector said I needed to clean my gutters, and they followed up 60 days later to make sure I'd complied. With 200' of gutters and 7 big pine trees, it was impossible to keep those gutters clean. I had to send them pictures showing I had removed all the gutters before they'd leave me alone.

Insurance companies often start new customers out at relatively low premiums, and they up the amount insured 10-15% every year. Look up 4 years later and you're paying premiums for a house assessed twice what it would cost to rebuild it--and charging owners by the $ thousand. It's their mode of operation.

I try to keep down any claims to where I can change companies every 4 years or so--to keep the premiums down. It's just a shame that our state's Gulf Coast gets bad storms from time to time that screw up our state's loss ratios with insurance companies. We're 400 miles away from where the hurricanes hit.
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Old 10-24-2015, 10:20 PM   #6
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Your split level looks kind of like my split level (except we don't have a garage). We're insured at 1807 sf, so your 1500 sf is probably about right.

We also don't have a basement, so it's 1807 sf with just the 3 levels of the split level.

Our assessor's office calls our lowest level (which is finished and completely above grade) as a "partial basement" but I pay full insurance on the square footage. Not sure how the assessors office treats our square footage.
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Old 10-25-2015, 07:58 AM   #7
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My insurer has no idea of the sf of my house. The agent and I had a discussion on what the cost of rebuilding would be (which was easy in my case since we rebuilt in 2010-2011) but never about square footage.

Is the $ amount of coverage they are getting in line with what it would cost to rebuild? If so, I wouldn't worry about the square footage. IOW, I'm guessing that the square footage is simply a means to estimating the replacement cost and therefore the coverage limits.

Edited to add: BTW, my aunt has the exact same design, and around here it is referred to as a tri-level. A split-level is different in that it typically has an entry halfway between the "basement" (which is only 1/2 below grade) and mainfloor and you take a half a flight up to the main floor and half a flight down to the basement.
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Old 10-25-2015, 08:01 AM   #8
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My insurer has no idea of the sf of my house. The agent and I had a discussion on what the cost of rebuilding would be (which was easy in my case since we rebuilt in 2010-2011) but never about square footage.

Is the $ amount of coverage they are getting in line with what it would cost to rebuild? If so, I wouldn't worry about the square footage. IOW, I'm guessing that the square footage is simply a means to estimating the replacement cost and therefore the coverage limits.
I believe that the formula is based upon kind of construction and square footage, the kind of construction determines the square foot price, and you multiply by the square footage to get the price. This is the way the books on construction estimating work.
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Old 10-25-2015, 08:04 AM   #9
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True, and sometimes different multipliers are used for above grade sf and below grade sf. I guess my point is that the focus should be on the end result rather then the square footage because the premium is based on the coverage, not the square footage.
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Old 10-25-2015, 08:52 AM   #10
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I can't speak for insurance estimation, but around here for property tax the square footage is based on living space. If you finish a basement... it counts as living space. It doesn't really have to be done all that well. When I bought this house 25 years ago, I ripped out a poorly finished room in the basement to put in a work shop. I had the county appraiser check it during the reappraisal period and had it updated on the records.

Often insurance companies count unfinished basements by noting the house has an unfinished basement instead of a slab or crawlspace. These differences do need to be considered for rebuild cost. I would expect that you should be able to measure and come up with something close. I won't know if they include the walls in the approximation.
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Old 10-25-2015, 09:11 AM   #11
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As I recall, sf is based on outside dimensions so it is fairly easy to calculate a reasonable estimation.
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Old 10-25-2015, 10:50 AM   #12
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As I recall, sf is based on outside dimensions so it is fairly easy to calculate a reasonable estimation.
Using outside dimensions to calculate sq. ft. only works for bungalows,.

A split level can have a footprint of 1000 square feet but will actually have 1500 square feet of living space. A 2-storey can with a footprint of 1000 square feet has 2000 square feet of living space. In both cases, the cost to rebuild will be more than that of a 1000 sq. ft. bungalow, which explains the additional cost.
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Old 10-25-2015, 11:29 AM   #13
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No kidding Sherlock ... it's obvious that one needs to consider the number of floors in addition to the footprint... at least obvious to most.
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Old 10-25-2015, 11:56 AM   #14
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The insurance company says the rebuild cost would be $279,000
While the market price is possibly as high as $200,000

I understand that rebuilding could be more than buying, but it seems to me very high. As the rebuilding cost does not have to pay for the land, which must be worth $30,000.

Are the costs of rebuilding around $175 per sq foot ?

Maybe the issue is the previous insurance company was using the wrong size by not counting the semi-buried family room portion ?
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Old 10-25-2015, 12:02 PM   #15
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In the event of a fire, the cost to rebuild would also include the cost to cleanup and dispose of the existing structure.
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Old 10-25-2015, 12:20 PM   #16
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+1 ..... presumably the slab or foundation would be reusable with some cleanup, if applicable well and septic would be reusable, etc. $175/sf doesn't sound out of line to me depending on location.
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Old 10-25-2015, 03:11 PM   #17
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+1 ..... presumably the slab or foundation would be reusable with some cleanup, if applicable well and septic would be reusable, etc. $175/sf doesn't sound out of line to me depending on location.
$175 for avg. is about right, will vary some for regional labor cost. New tract cons. cost's lot less, but new tract home cost vs. a partial rebuild on a single dwelling is apples to oranges in cost , as much as it pains me to defend Allstate.


PS The attached garage should be rated at a lower rate $ per sq. foot , like 1/3 $ of the finished living space. My Allstate homeowners policy ( Bungalow ) always mentions __ car attached garage.
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Old 10-26-2015, 03:51 PM   #18
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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.
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Old 10-26-2015, 04:01 PM   #19
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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.
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....
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Old 10-26-2015, 04:26 PM   #20
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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....
Same here. So a heavy windstorm/tornado that tears off the roof and destroys the siding resulting in $15k of damages would be paid at only 80% (or whatever). They set the rules, we get to choose whether we want the insurance on their terms.
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