Homeowners insurance coverage
How do they decide what the insurance coverage should be on your home? Is it based on Real estate market value? Live in kenwood village where average selling price for bi-level or split is about $250,000. Insurance has put coverage at $440,000. That seems a bit excessive, also pricier premium.
That would be a good question for your agent, but also remember, it cover the contents of the home, driveway, outbuildings (sheds), fences, etc.
"remember, it cover the contents of the home, driveway, outbuildings (sheds), fences, etc."
But it *doesn't* cover the value of the land.
The "rebuild" cost of a house will always be higher than the market value.
Just consider what would have to happen if your house burned down... you pay for debris removal, new excavation, engineering plans/permits... before you even get into material costs for the house itself (plus labor), all new appliances, as well as any possessions covered by insurance that were inside at the time.
Now, whether it would go from $250K to $440K is a good question. It's hard to get an accurate $/square foot rebuild cost without actually hiring an architect because there are just way too many variables.
"But it *doesn't* cover the value of the land."
The land isn't going anywhere and doesn't generally burn down.
Also if you experience a total loss, I believe there is coverage if you need to temporarily relocate (rent or stay in a hotel).
Also include bringing the home up to current building codes after a large loss. Things like higher insulation R value in walls and ceilings, wider doors, updated electric, hvac, etc.
If you do a google search for replacement cost and you will find both free and pay calculator web sites.The most important thing is what does your insurance company says the home is worth? Most agents have a replacement cost program to estimate the replacement cost. Warning, make sure you provide accurate data, do you plaster on lathe walls or sheet rock, block walls or poured concrete basement walls, new over the top kitchen or contractor grade cabinets, full tile bathroom or no tile at all. These are all questions they should be asking you. Most important make sure the sq. ft. is correct since the replacement cost is based on sq. ft.
I am not positive without going through the paperwork, but are you sure about Homeowners insurance covering outdoor things? I believe my agent told me that items in the garage, sheds, outbuildings, etc... Were NOT covered at all. Maybe I just need a new company lol
I think most homeowners policies give 10% of your home value for other structures. You can buy more if you want. You might want to check that JRT. I thought that was standard.
Ok thanks Bessie. I will check into that. It seemed a bit unusual to me, but I thought that was just how it worked.
Those things should be covered - and also your property in your car if it's stolen...
I just got my renewal for my HO insurance policy. It's a 9% increase from last year. Looking back further, I got an 8% increase in 2017. That's 17% in two years. I have never, ever had a claim. Is anyone else experiencing increases like this?
I have a call into my agent, but haven't heard back from him yet.
Same here, never had a claim, but it's been going up. Not sure of the percentages though ..... I'll have to look at that tonight.
Someone has to pay for all the claims the Insurance companies paid for all of those hurricanes that hit the south last year. It is called spreading the risk. Same thing happened with me and that was the explanation I got.
Off the top of my head, I can think of a few reasons why HO premiums would increase regardless of whether or not you've filed a claim...
Inflation drives materials and labor costs higher every year. Also, your roof is another year older which makes the possibility of catastrophic damage greater from one year to the next.
Time to shop your insurance, I just did and saved $1000 on my homeowners, auto and umbrella coverage. Same limits on the policy across all lines of coverage. Ended up with AAA yea the company that you get your towing from. I switched from Liberty Insurance where I had been a customer for 7 years.
Check your declarations page. Many companies increase the home value automatically to account for rising prices. That was normal in times past, today it may not be what you want. The cost can increase quite a bit for a bunch of coverage you don't need.
I have the declaration page right here. I did see that the values went, but figured that was normal, as nothing ever gets cheaper. LOL
Do these increases seem excessive?
Dwelling went up $11,000, other structures $1,000, personal property $7,700 and loss of use $2,200.
Still no call back from my agent.
NotinNJ - I did have my agent shop around a few years ago. Used to have Allstate for both auto and home, but the home got out of control. Ended up with the present company, Preferred Mutual, for home. Still have Allstate for auto. Nobody could give me a cheaper price. Not even NJM, who most people rave about.
Allstate has a bad rep for either denying or lowballing payouts on claims. That's why they are cheap.
Real estate has not always been going up like that. I personally wouldn't want the amount of coverage to go up that much. If you sold your house last year would you have gotten $11,000 for it if you tried to sell now? I doubt it. That explains at least some of the increase.
Replacement cost and real estate what you can buy your house for are apples and oranges. The $11K increase reflects the increase in labor and material costs. Remember if you have a loss you want it repaired now, not in 3 months when your buddy has time to fit you into his schedule. The replacement costs drives the cost for contents and any outside structures i.e. a shed, detached garage etc. Make sure you have 100% replacement cost and not ACV. Hopefully the % your agent is getting from you they are looking out for your interest.
I was on the commercial side of insurance for 36 years but did home replacement costs estimates early in my career.
GC - We have never had a claim problem with Allstate. Over the last 10 years, we have had three claims. They were all comprehensive. Two deer collisions, one for me and one for my husband. My husband had a second comprehensive claim when someone hit his car when it was parking in a parking lot.
My agent got back to me. He can offer me a policy with another company for about $200 less per year. However, the coverage amounts are less. $43,000 less for dwelling, $4,300 less for other structures, $30,100 less for personal property and $8,600 less for loss of use.
Does anyone have an idea on how much it costs to build a house per sq. ft. in NJ these days? I don't want to be under insured. Obviously, it wouldn't be worth saving the $200/year.
What does your agent say to use for the replacement cost? You are paying him a % of your premium to him for just this. Also what is the AM Best rating for the company that had the lower premium, at minimum you what an "A" rating. If you google building replacement cost you will fine both free and pay for calculations. How much are they going above the replacement cost example my policy pays up to 150% of the replacement cost so I feel I am covered. When I was shopping my coverage for replacement cost varied by $100k most were in the same ballpark so with the 150% overage I was covered even with going with a lower replacement cost.
Notin NJ - Thanks for your reply. My current company is an A, the proposed company is an A-. The coverage is 150%. My agent is now looking into raising my deductible with the current company. $1,000 seems really low to me in the scheme of things.
Go to Florida where the rates are about double due to the Florida windstorm coverage and the mandatory sinkhole coverage.
I just switched my homeowners and auto insurance over to Farmers. I got more homeowners coverage for about $60 less per year and am saving about $800 per year on my car insurance. Crazy! I wish I had called there sooner.
Missed this thread originally but want to chime in. Those of you with historic homes or otherwise unusual features in your homes should make sure you have a rebuild rider. A new home with the same square footage as our 1870's home would cost a fraction of a stick built home with the same or at least similar architectural details. Similarly if you have some kind of special trim or detail that deviates from the norm, custom cabinetry or hardwood trim in a parlor or even high end appliances or other specialized equipment, that you include it in riders. Yes these will all cost you a little more, but if these details were important enough to build and pay for they should be important enough to insure.
More than a little more. But yes, understand what coverage you have and historic homes will need this to return it to the way it was in the event of a covered loss versus using modern materials.
"Go to Florida where the rates are about double due to the Florida windstorm coverage and the mandatory sinkhole coverage." -iJay
This is an incorrect statement, neither of those are mandatory just because you live in FL. The coverage requirement is based on where you live in FL.
Homeowners insurance is mandatory if your home is mortgaged. A friend was with the same insurance company for almost 30 years without ever having a claim. One year she had 2 claims (months apart) which they did pay out, but when her renewal came up they dropped her due to "excessive claims". They are very happy to take your premiums, but they don't like paying out. She had a difficult time finding new insurance.
Joe, all homeowners policies must offer the coverage. In higher risk areas the insurance agents will automatically bundle it in quotes. Yes, you can remove it but that doesn''t make much sense in a state built on limestone with an increasing population draining aquifers. Windstorm, on the other hand has been deleted from the base policy and is brought back in via a Windstorm endorsement backed by the State of Florida (nobody else wanted to after Hurricane Andrew). You would be crazy to not add Windstorm coverage. If you have a mortgage they will likely require both.
Keep in mind the cost of building supplies are going up a lot. Lumber hit an all time high a few weeks ago,with one reason being a higher tariff is now in place for Canadian lumber. It could very easily cost more to rebuild your home than the market price for that home.
It usually does cost more for almost decades unless the value is in the land like in San Francisco.
Remember, you insure the structure for replacement cost, not market value. Insurance companies are strict on this now, in the past many agents underinsured properties to get lower rates and thus more customers. With Replacement cost if a house was insured for 300k and it cost 800k to replace it was covered. Now there usually are limits on replacement cost and strict guidance and independent inspections for replacement cost, not just the agent drive by...
Three years into The Great Recession, my 20-yr home insurance went up over 10% two years running which I found a stranger danger, but hey, loyalty. The second of those years, I had a big claim, many trees, substantial home damage which they paid on very nicely, even gave me some "tree dollars" which they didn't have to, but in the end I spent much more than provided without really that much uplift on my behalf. But it was OK and easy, they did me well. Then Sandy hit and I claimed zero, my weak trees were already gone.
Provider, State Farm, had said "inflation" and this price increase was before Sandy. So I said "huh, inflation during a recession go figure, wonder what the Sandy hit will be...." So after 20 years with them, after a great claim experience, I dropped them, they could care less which I thought strange too. I saved over 30% with better NJM coverage, they are very good at explaining what you have, don't have, etc. Real humans take their time to lead you through it. Since then, nominal COLA increase except I saw the Sandy et al increase in 2015, zero price increase since then. Overall, I am still saving a minimum of 10%.
Moral of story: insurance is like soap, just a commodity with many suppliers. Get one that makes you comfortable with what you are buying and feel free to change at any time. There is no allegiance to a falsely rising price. They will, by law, reimburse you for unspent coverage, so you can pick up new coverage any time you want.
Can anyone recommend a company for Home Owners Insurance in PA..?
Thnx in advance,
To get the best rate you need to insure your home and auto. It is a utility, the insurance contracts are very similar if not identical. Who gives the best rate is generally what matters. As far as rates, in NW NJ it was once one of the least risky areas in the nation. Then they extended the Hurricane risk well inland to this area. This along with the construction index going up substantially was the reason...
“To get the best rate you need to insure your home and auto. “
Not always. I was able to get a lower premium on our homeowners with more/additional coverage once I left the company that insured both our home and autos.
Usually with a multi-policy discount, but you need to shop around. I would recommend getting three quotes. And if they start raising your rates excessively look elsewhere. Switching oe at least getting a quote every few years is a good idea.
3wbdwnj, did you get a quote for your autos? Maybe it is decent price wise and will further lower your homeowners.
I did ask for a quote to bundle auto with HO and the auto was higher. Strange but true.
Anyone have any recommendations on good agents in the area, specifically for HO insurance (but would certainly investigate auto too)?
We've been insured with New Jersey Manufacturer's for years. You used to have to get it through your employer, but I underand anyone is eligible now. :-)
We were paying $1163 a year for our HO policy on our house in Flanders and when we switched over to NJM, it went to $552.
+1 NJM. Over 30 years for auto, added homeowners just before Sandy as State Farm price increases became too much to bear. Have gotten rebate back most years, always a nice perk at Xmas. All claims handled, they do most of the work.
I had NJM for 30 yrs and never had a claim. I just assumed they were the best because of their reputation. moved to Pa. 4 years ago. In NJ my 450K house cost me $800 yr, when I moved to Pa it went up to $900 on a 200K house. On two cars in NJ it cost
$1100+ for coverage, after the move it went down about $200. I stated checking around and now pay $500 homeowners and $580 auto for exactly the same coverage. called NJM and asked them why they were so far off on price and was not given any explanation. Good riddance NJM.
I am with allstate....$350 annual increase. I called. What they said: due to rising home values and a general across the board increase.
Mine went up too. A lot. I called my broker and they switched me to another carrier. Same coverage and a lot cheaper. It’s worth it to shop around. You can switch at any point.
2 weeks ago
I went with an independent agent this time. Switched and saved. Same for auto. Saved, plus didn't have to install that communist driving tracker for 90 days to get a discount.
I love how people now once again use the term "communist" to describe something they don't like, when actually that driving tracker is more a capitalists' tool, IMHO. It identifies drivers who don't drive as well as others and then the insurance co.makes them pay more for insurance if they seem to be a questionable risk.
If it was a communistic tool it would...well I can't really think why it would be used, since the communist way would be for everyone to pay equally high prices for the same coverage regardless of how crappy (or great) a driver would be. Therefore, why even bother checking how they drive. Everyone would share the pain.
They are comparing it to communism because it is tracking what you are doing. Remember 1984? They are watching!!!!
I wonder when you say 1984, how many people actually know you are referring to a book?
1 week ago
Yes, more of a big brother reference, but it is capitalism. I just have more of an issue with being watched
"Big Brother" has nothing on the Capitalist companies that have been keeping track of your consumer preferences in order to market items to you that have a higher gross profit percentage for them. All your club cards, etc. have been going into the database for years now. They know what TP and toothpaste you use, what foods you eat and whether you're eating "healthy" or not.
There is an extremely LARGE amount of information that can be extrapolated from all that information, including conclusions that may be drawn from the statistical evaluation of the overall information, whether that be individual, ethnic or overall population profiles, or temporary trends.
"Big Brother" is a tool historically used by both Fascism and Communism, by the way.
"Plus capitalism, they should have met the lowest quote with no tracker." Insurance is essentially a sellers' market. Sure, they need customers to provide business and an income for themselves, BUT they want the customers who will prove to be the least risk and can afford to weed out those who are a higher risk to them. That all starts with the Actuary (a field I'd thought about getting into years ago). They're the ones that take all the data they know about drivers in general and set basic rates, based on how likely a particular group is to get into an accident, whether that be by age, sex, marital status (and now sometimes, credit report), etc.
They need us, but can afford to pick and choose to maximize their profit, however we HAVE to have them, whether that be in order to drive a vehicle or rent a home or have a home mortgage. Of course if you can remain on your best driving behavior while their tool is recording your data, then you're all good.
Maja2: What i wonder about with those car Trackers: You can get a discount if they see you drive slow and safe per that tracker device.
But,can they raise your auto insurance rates if you drive fast and are not a safe driver??
I think it's just another way to (actually) Raise your auto insurance rates!
They “track” you when they check how many points you have on your license.
They “track” you when they check how many claims you have made against your policy.
They track” you when they utilize your credit score to calculate your premium.
No tracker, really?
Most important driving tip I ever learned- a car is not a time machine.
You leave late.
You arrive late.
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