We are buying our first home and I just found out that the replacement value that our homeowners insurance will cover is $42,000 more than what we are buying the house for.... is this a good thing?
2007-01-22 09:38:34 · 7 answers · asked by amyann16 3 in Business & Finance ➔ Renting & Real Estate
Yes!! The replacement value coverage is what you would need monteraily wise to build a home from the ground up, in the event from a fire, you would need your mortgage paid off, also what about you personal property there should be an amount for that, liability coverage and also guest medical or it is an incomplete policy. Liabilty is what you would have if someone got hurt on your property and also guest medical is a onetime payment for a guest on the property that gets hurt and requires medical attention. Ask your insurance agent if you are unsure the cost sounds right depending on where you are located in the country and what percent financing you did for the home. Premiums depending on your credit score and your location are about 1 percent of the purchase price of the home or less.
2007-01-22 09:52:29 · answer #1 · answered by Marianne 2 · 1⤊ 0⤋
It's up to you. If your home burned down to the ground you will need the replacement cost coverage to rebuild your home the way it is. Otherwise you are betting that it doesn't burn all the way down and you only need some insurance not enough to rebuild the whole thing. It's a matter of what you feel most comfortable with. Most people can't afford it.
2007-01-22 09:46:05 · answer #2 · answered by Anonymous · 0⤊ 0⤋
I think it is, because sometimes the cost to replace/rebuild is more than the market value of the home. I know my house is insured for more than I paid. My insurance agent explained that because I have an old home (built in 1876), the custom, original woodworking would be much more expensive to replace than regular trim.
2007-01-22 10:00:27 · answer #3 · answered by Luna 1 · 0⤊ 0⤋
Replacement value of home needs to be higher than purchase price.
Replacing the house COST much more than buying a house. rebuilding COST mo0re than buying.
make sure you get contents insurance.
2007-01-22 09:52:46 · answer #4 · answered by Anonymous · 0⤊ 0⤋
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2016-10-15 23:06:16 · answer #5 · answered by ? 4 · 0⤊ 0⤋
Yes, cause you don't have to rebuild, most people don't rebuild anyways,. they just go buy another home. It would cover all the closing costs and to replace furnishings.
2007-01-22 09:46:53 · answer #6 · answered by ♥ Mary ♥ 4 · 0⤊ 0⤋
No, that just means that that's about what it would cost you to rebuild.
2007-01-22 09:42:46 · answer #7 · answered by Bostonian In MO 7 · 1⤊ 0⤋