Homeowner's insurance?

Question

My house is now worth substantially more than it was when I purchased it a few years ago. At the time of purchase, I had the house insured for the appraised value. Now it is worth tens of thousands more. I'm concerned that I would lose all of this equity if there was a disaster like fire that destroyed the building. Is it wise to increase the amount of coverage now and if so, is it usually neccessary to have another appraisal done or do insurance companies simply allow a homeowner to get coverage in any amount they desire?

Answer 1

insure it for more

Answer 2

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RE Homeowner's insurance?

My house is now worth substantially more than it was when I purchased it a few years ago. At the time of purchase, I had the house insured for the appraised value. Now it is worth tens of thousands more. I'm concerned that I would lose all of this equity if there was a disaster like fire that destroyed the building. Is it wise to increase the amount of coverage now and if so, is it usually neccessary to have another appraisal done or do insurance companies simply allow a homeowner to get coverage in any amount they desire?

Answer 3

Well, you have a rotten (or lazy) agent if they let you insure it for the appraised value.

"Appraised value" is market value. Banks and real estates use it. "Insured value" is cost to rebuild. Insurance companies use cost to rebuild. If the cost to rebuild the house was, say, $200,000, and the appraised value was $100,000 (common with old houses that have lots of hand carved woodwork and detailing you just can't get these days), then right off the bat you would have been 50% underinsured.

Which MEANS, if you had a kitchen fire, with $20,000 damage, the insurance company would have paid . . .. $10,000. 50%. The percentage that you insured your house for.

Which is why I think you IMMEDIATELY need a new agent. They need to come out to the house, and do a "square foot estimator" to calculate the current cost to rebuild. You need to increase to that amount RIGHT AWAY.

Insurance companies usually want you to insure your house from between 90% to 100% of the cost to rebuild. If you underinsure, they only pay out the percentage that you insure (not quite accurate, but it's a formula I don't want to go into here). They don't want to OVERINSURE, because then you have a reason to burn down the house.

The appraisal is completely unnecessary. A good agent will make the calculation for you.

At that time, you should really sit down with them, and discuss the following options: Replacement cost on the dwelling & contents, Building & Ordinance endorsement, any specialty collections you might have, jewelry, coin collections, etc; deductible credits, package credits, alarm credits, and any update credits that might be available.

Answer 4

I would recommend that you try this web site where you can compare quotes from different companies: http://QUOTESDEAL.NET/index.html?src=2YAQKxVlvzNF

RE :Homeowner's insurance?
My house is now worth substantially more than it was when I purchased it a few years ago. At the time of purchase, I had the house insured for the appraised value. Now it is worth tens of thousands more. I'm concerned that I would lose all of this equity if there was a disaster like fire that destroyed the building. Is it wise to increase the amount of coverage now and if so, is it usually neccessary to have another appraisal done or do insurance companies simply allow a homeowner to get coverage in any amount they desire?
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Answer 5

A lot of Insurance companies, depending on the state/company, have an automatic 3-4% increase factor built into the policy. Yours obviously doesn't. All you have to do is call you Agent and tell me you feel it is underinsured. As your agent, they should have picked up on that for you by now! We review everyone's policy every year. Its a lot of work, but that's why we retain as much of our business as we do! Right now, to build it is approximately $75-$95 per square in the state of Texas. Depending on the coverage your'e looking for and the area you're in. Just give them a call. Most of the time there shouldn't be an appraisal needed! They have programs online called "Replacement Cost Estimators" that they can run to determine the RCV.

Answer 6

Call your insurance company for exact details since some companies vary. Most will have you get the house appraised again, but before you do (and spend the money on getting it done), check and make sure your insurance company requires it.

Answer 7

insurance companies let you insure it for any amount you would like. if there would be a disaster..the best thing to do is insure it for an updated appraisal. if it's worth more...insure it for that amount in case anything should happen.

Answer 8

Get insurance quotes

Answer 9

call your agent, tell him you think you need to increase your coverage and ask him to do a Replacement Cost Estimater, that will tell you how much your house should be insured for

Answer 10

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