Homeowners Insurance

[Warstud]

Im looking at my mothers Homeowners Insurance Policy and a few things that standout are :

Property and Liability Coverage
1) Other structures ( shed ) - $26, 400 ..... cost about $ 200 to build 20 yr ago .
2) Additional Living Expenses and Loss of rents - $ 52,800
3) Personal liability - $ 500, 000

Coverages That Apply
1) Domestic Appliance Leakage - $50,000
2) Property Coverage Fungi , Wet Rot , Dry Rot - $ 26,400
3) Equipment Breakdown Coverage - $ 100, 000

Some of these look like the rediculous charges on a phone bill . Thoughts

 

[ctechbob]

They are usually a percentage of the main dwelling coverage. Probably based on lots of actuarial math behind the scenes.

 

[Hall]

We were talking about coverages at work recently and I looked at my policy and also saw "Other structures" with $61,600 coverage. It's been on our policy at least (4) years (what's available to see online) and I don't know what it's for. Actually emailed my agent and am waiting.... We did buy a shed ~2 years ago but it's not quite worth that amount. We have no "other" structures at all. A quick Google search says it does cover a fence. In our case, (3) neighbors actually fence our yard and we only have a very small amount of fence ourselves.

 

[NormanBuntz]

Be glad you don't live along the NC coast. The NC Insurance Commission currently is considering an insurance industry request for a 42% rate increase on homeowners insurance. Twenty one years there with zero claims by me. Not good.

 

[samven]

I always wondered about what seemed excessive contents coverage considering they limit the real valuables like Jewelry, guns, cash, cameras and some others to $1000/ea. I really dont think my old clothes and funiture are worth 100k but my agent says they just include a percentage of the structure .

 

[99Saturn]

Thoughts:

Property and Liability Coverage
1) Our Policy Dwelling Extension (ie, Other Buildings) is minimum 10% of Dwelling
2) From our policy: Additional Living Expense. We cover the actual loss incurred for increased expenses over and above what you normally spend for food, shelter, and related items for the shortest time required to repair or replace your home, or for your household to settle elsewhere up to 24 months.
3) Personal liability - I believe typically ranges from $100K to $500K, probably YMMV by state re minimum, not sure. Really how much liability coverage does one want. We carry a low personal liability on our home but buy an umbrella policy. Seems like your mom's policy is at the upper end.

Coverages That Apply: Are these optional or required? Breakdown of what is covered for each? I would start there. When we bought years ago I went through the policy to find out what was optional or which were mandatory and cost for each at the time. Simple example, there was a jewelry add on, ended up waiving as we don't have anything all that expensive. Coverage may be take it or leave it I suppose or a factor based on dwelling. For example, one of the optional ones we carry is back up of drain or sewer, but it only covers 5% of dwelling. Worth asking would your mother rather self insure in the event of needing any of the three coverages you listed.

 

[99Saturn]

I always wondered about what seemed excessive contents coverage considering they limit the real valuables like Jewelry, guns, cash, cameras and some others to $1000/ea. I really dont think my old clothes and funiture are worth 100k but my agent says they just include a percentage of the structure .

Ours is 75% of dwelling. I doubt in an event of a total loss we could come up with a list of anywhere close to that number. That said, I've also heard (in passing from our agent) the best thing someone can do is somehow have a comprehensive list, or film a walk around of house and contents. Basically he said at one point in chatting, when someone has a disaster they know they have clothing for example, but how many t-shirts, pairs of jeans, etc. is hard to pin down and owners can easily come up short. I mean, is insurance really going to believe me when I tell them my oil and filter stash.

 

[Exhaustgases]

This is how everyone will either lose their house or everything. You know the nothing and be happy statement.
The crystal ball says the day is coming when insurance will be pricing everyone out of the market, almost everyone anyway.

 

[Jdeere562]

My insurance company has my house valued, at probably twice what it is worth on the open market.
Probably just another way to milk $ out of me. I should call them on it.

 

[ctechbob]

My insurance company has my house valued, at probably twice what it is worth on the open market.
Probably just another way to milk $ out of me. I should call them on it.

Maybe, maybe not.

You have to look at what it would cost to rebuild the house should it burn to the ground. That is what your replacement cost is based on.

As memory serves, that includes site cleanup and remediation. Not the same as starting with a virgin piece of ground.

 

[Warstud]

We were talking about coverages at work recently and I looked at my policy and also saw "Other structures" with $61,600 coverage. It's been on our policy at least (4) years (what's available to see online) and I don't know what it's for. Actually emailed my agent and am waiting.... We did buy a shed ~2 years ago but it's not quite worth that amount. We have no "other" structures at all. A quick Google search says it does cover a fence. In our case, (3) neighbors actually fence our yard and we only have a very small amount of fence ourselves.

Yea ...... I'd call them on that . My shed was insured for about $27k so I had them take it off . Then I noticed they put it back on the policy .

 

[hrv]

I was surprised that my home owners insurance only went up by 98.00 for the new renewal year in April...

 

[Dave Hess]

Maybe, maybe not.

You have to look at what it would cost to rebuild the house should it burn to the ground. That is what your replacement cost is based on.

As memory serves, that includes site cleanup and remediation. Not the same as starting with a virgin piece of ground.

I was thinking the same.

To rebuild a ‘total loss’ would be very expensive in 2024.

 

[GMFan]

We just increased our dwelling coverage to account for the increase in construction costs. The value isn’t based on the “market value of the home”, but the actual cost of a (potentially) complete rebuild of your home if it burns to the ground. Depending on the age, condition, property size, lot, location, etc. the rebuild cost may be more or less than the market value of the home. Whatever you do do not be underinsured because it’s a terrible thing to experience if disaster strikes. If you live in an HOA and the HOA covers the exterior and roof of the home, keep in mind the HOA could go bankrupt or be underinsured itself after a disaster. It could be wise to carry enough coverage to cover what the HOA insures.

 

[BISCUT]

A tidbit of homeowners insurance here. BIGTOG'ers tend to be in the know so apologize if it's not pertinent. Review your policy and determine if you are being charged replacement for your land. My land is a little over 3 acres and about 180k if it were an unimproved building lot. Years ago when I reviewed my policy home value was $750-850k and I was paying a premium based on that. I called my insurance company and they knew exactly what I was asking and removed the land value from my policy. For many years, up until the recent inflation hikes, my premium including a million umbrella, was $75 a month.

Caveat: I'm on a small mountain and do not have town water or sewer and everything is solid granite so the only underground infrastructure I have is a 40ft run of electric and water pipe from my well. I also have no issues with flooding or slides or anything else that could seriously damage my property.

 

[Astro14]

The basic coverage makes sense. Replacement costs are high. $200 may have been the cost of materials for the shed, decades ago, but to get someone to come in a build it? Yeah, maybe it is $26,000.

The additional coverages, particularly 1 and 3, are “padding”. I don’t see the value of covering appliances.

 

[RhondaHonda]

Usually those additional coverages don’t add much in premium to the overall price.

If your house burns down, you are going to have to rent something while it’s rebuilt which could easily go to 24 months if there’s an investigation into the fire, demo, cleanup, permitting, delays, etc. Maybe you can rent something comparable for $1,000 a month, but that’s unlikely. You may have to pay for a few hotel rooms if there’s nothing available. You may have to pay a premium if going month to month instead of signing a lease. I wouldn’t mess with that particular one.

Insurance always feels like a scam until you need it.

 

[SC Maintenance]

Would be best to ask your agent - as these might be required by either the state, or that insurer. The insured amounts are often minimums as a percentage of the main policy. It should outline them in the declaration page. I have some of those, and some of the additional - that show the cost as "included".

 

[zzyzzx]

Caveat: I'm on a small mountain and do not have town water or sewer and everything is solid granite so the only underground infrastructure I have is a 40ft run of electric and water pipe from my well. I also have no issues with flooding or slides or anything else that could seriously damage my property.

Lightning strike.

 

[demarpaint]

Shop around. In well over 40 years of home ownership, owning a few homes, and rental property, I can confidently say familiarity breeds contempt. That's true with every form of insurance, shopping around assures you the best prices, and keeps brokers honest.