Homeowners insurance question

[thatsbaseball]

Just replaced the floor, steps and a few boards on my deck and it cost me what the entire deck cost to build 8 years ago. Leads me to ask what the actual cost would be if I had to replace a significant part of the house itself. I thought I had plenty of insurance but now I don't know. I'm calling my agent today and upping my coverage as much as I can. Anybody else been thinking along these lines ?

 

[Drebin]

Just replaced the floor, steps and a few boards on my deck and it cost me what the entire deck cost to build 8 years ago. Leads me to ask what the actual cost would be if I had to replace a significant part of the house itself. I thought I had plenty of insurance but now I don't know. I'm calling my agent today and upping my coverage as much as I can. Anybody else been thinking along these lines ?

Does your premium reimburse at replacement cost, or actual cash value? The former would be a little more expensive, but provides reimbursement at today's value to fully replace everything that's lost in a claim. The latter is a little cheaper, but applies depreciation. I would think if you have replacement cost coverage, it really doesn't matter how expensive lumber and materials have gotten - they would give you enough to fully replace.

 

[thatsbaseball]

Thanks, trying to get my agent on the phone now. I've been reading and hearing about building material costs but it really hits home when you have to buy some. Sheesh

 

[Jeffreauxdawg]

I think they make some pretty simple riders that will help out. I had one on my last house and it added 50% of additional coverage on the dwelling for $114 a year. I'm sure the insurance experts on the board no more, but mine was required to cover the mortgage.

 

[WrapItDog]

If the deck is attached to the house it is covered under the dwelling coverage of the policy. If the deck is not attached to the house it is covered under the other structures coverage. Other structures limits is usually 10% of the dwelling coverage. You can purchase additional other structures coverage if you need more than the standard 10%.

 

[johnson86-1]

Just replaced the floor, steps and a few boards on my deck and it cost me what the entire deck cost to build 8 years ago. Leads me to ask what the actual cost would be if I had to replace a significant part of the house itself. I thought I had plenty of insurance but now I don't know. I'm calling my agent today and upping my coverage as much as I can. Anybody else been thinking along these lines ?

If you had a total loss, would you really want to rebuild where you are? Or would you be fine going to buy somewhere else? The reason I ask is that in a lot of markets, you pay a pretty steep premium to build versus buying an existing home. My previous house was great, but it was worth probably $55k less than it would cost to rebuild it, so I tried to insure my house just for it's market value (which was still more than I paid for it) with the logic that if I had a total loss, I'd basically have a paid for lot and be able to go spend the same amount on another house. That also would get me a lower deductible. The insurance company rejected that and gave me a minimum insurance number that basically split the difference between the cost to build and market value. All that to say, if you are fine buying somewhere else if you have a total loss, you might be adequately insured at well less than the cost to rebuild.

Now I carry replacement costs because I would want to rebuild if I had a total loss. Just something to consider.

ETA: You need to make sure the state you are in doesn't let the insurance company pay less than the policy limits for a total loss. And you want replacement value so you don't get screwed on a major repair if it's not a total loss. But you can potentially be ok if the total limit is less than the actual cost to rebuild. Definitely would want to check with your agent about how they would handle a claim if that's the case. I know after Katrina some insurance companies took the approach that if somebody wasn't rebuilding, they would give a really lowball amount claiming that it was replacement value so people just trying to get into a house while they waited for contractor availability to rebuild were forced to either pay out of pocket or take a discount compared to what they were owed just to get a roof over their family's head.

 

[thatsbaseball]

Thank you

 

[dawgdoug1962]

I've never used them, but Farm Bureau was super in covering the complete loss by a tornado of my son's house. The agent was there before the day was over as friends were helping salvage what they could of clothes, etc. He was there the next day with a check for the amount of their coverage (not replacement at current prices)but almost enough to build again... a little less square footage this time....coverage for camper and unattached garage where it was stored...covered contents that were destroyed and paid monthly rent for a year while they were rebuilding....I'm not being given anything for this endorsement...LOL.. I have been truly impressed with their response all the way through. I suspect being in a small community and knowing agent well might be an asset too.