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sportsnut
Citizen
Username: Sportsnut
Post Number: 2417
Registered: 10-2001
| | Posted on Friday, May 19, 2006 - 11:03 am: | 
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I just received a quote for our homeowner's insurance and I know its been discussed before on these boards but I'm wondering if I'm buying too much insurance. The new agent kind of has that used car salesman type feel to him and I really don't trust him for this kind of stuff. He's also included an umbrella policy, which I'm inclined to decline at this time.
Just wondering what others are paying for homeowners.
The current quote is for $400K dwelling, 40K for "other" structures and 280K of personal property. Liability of 500K and guest medical of 5K. Employer's liability, workers comp and identity theft, building code problems of 40K.
Replacement of the structure is estimated at 360K. Total premium is 1,029.
The umbrella policy is a $2M policy and is about $400 per year.
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Bklyngirl
Citizen
Username: Bklyngirl
Post Number: 55
Registered: 10-2005
| | Posted on Friday, May 19, 2006 - 11:57 am: |
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I don't have that info with me, but I'll get back to you later today or tomorrow with it.
bklyngirl |
Bob K
Supporter
Username: Bobk
Post Number: 11576
Registered: 5-2001
| | Posted on Friday, May 19, 2006 - 12:44 pm: |
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Great timing. We have almost the exact homeowners coverage from State Farm and it is around $800 to $850 per year. We have replacement cost coverage.
Why are you buying $400k in coverage if the replacement cost is $360K?
The personal umbrella seems high. How many cars do you have? How many under 25 drivers? How many homes? Boats?
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greenetree
Supporter
Username: Greenetree
Post Number: 7740
Registered: 5-2001
| | Posted on Friday, May 19, 2006 - 12:51 pm: |
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What's an umbrella?
resist the temptation, smartasses.... |
Bob K
Supporter
Username: Bobk
Post Number: 11578
Registered: 5-2001
| | Posted on Friday, May 19, 2006 - 1:18 pm: |
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An additional layer of casualty protection that sits over your primary automobile and personal liability (part of the homeowners package) as well as any other coverages (yacht, etc.) you may have. In theroy it is broader than the underlying coverage, hence the term umbrella, so it may pick up some losses not covered there, although now a days this is very rare.
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Eats Shoots & Leaves
Citizen
Username: Mfpark
Post Number: 3365
Registered: 9-2001
| | Posted on Friday, May 19, 2006 - 1:32 pm: |
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Not only broader, but it extends coverage in case the loss exceeds the limits covered by the primary liability policies. For example, if your liability policy covers up to $1,000,000 and someone slips and falls in your house and successfully sues you for $2,000,000, the first million will come from your primary liability policy and the second million from the umbrella policy.
I agree that the umbrella seems a slight bit pricey, but you need to compare apples and apples (make sure the exclusions and coverages are similar when comparing two policies-they can differ in radical ways). |
xavier67
Citizen
Username: Xavier67
Post Number: 648
Registered: 6-2002
| | Posted on Friday, May 19, 2006 - 2:50 pm: |
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How can your replacement cost be only 360K??? Sporty, unless you live in a tiny house, are you sure you're not under-insured?
I went through this last year, thinking that I was paying too much in premium due to being over-insured. So I had an appraiser (from Chubb) come out to get an accurate, up to date replacement cost. And it turns out I was under-insured! The full replacement cost of our 4-bedroom, 3-bath 1927 dutch colonial came out to 930K.
Obviously, everyone has different comfort level in terms of coverage, but 360K may not come close to real actual cost of rebuildng your house in case of total loss. Obviously, that may be fine with you since your premium won't be as high. |
sportsnut
Citizen
Username: Sportsnut
Post Number: 2418
Registered: 10-2001
| | Posted on Friday, May 19, 2006 - 3:00 pm: |
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Bobk - three cars, only one home, no under 25 drivers living at home (currently).
Xavier67 - I had asked the same question of our previous agent and he thought that 400K was about right to replace the home. Our house is not big or particularly small - about 2500 sq. ft. Built around the same time as your home, with 4 brs and 1.5 baths. Market value for homes in my neighborhood for houses this size can range from the upper 5's to mid 6's. |
oots
Citizen
Username: Oots
Post Number: 400
Registered: 6-2001
| | Posted on Friday, May 19, 2006 - 3:10 pm: |
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xav:
how much is your premium? I have chubb-dwelling coverage at $740K-extended replacement cost-premium of $1800!
They do provide $1mil in liabilty coverage for my shore house for only $21!
oots
btw-I think their replacement cost numbers are high! |
greenetree
Supporter
Username: Greenetree
Post Number: 7745
Registered: 5-2001
| | Posted on Friday, May 19, 2006 - 3:13 pm: |
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Wow - that's a high replacement cost - almost a million? I'll go to contractor school for that. You have to figure that if a builder is charging $800-1.25M for a 8k-10k SQFT McMansion, which is all new construction, that number includes a nice profit. Even if you use better quality materials, it would be hard to envision $930k on a typical 1920s Maplewood Colonial. It's not like you'd have to buy the land.
We were told the same thing as Sports when we questioned the replacement cost. Rebuilding the house is not associated with the market value of the house. It's the cost of materials and labor. Some things can't be replaced (materials no longer in existence or practical to use as building materials these days) and you'd have to substitute. |
Smarty Jones
Citizen
Username: Birdstone
Post Number: 662
Registered: 10-2005
| | Posted on Friday, May 19, 2006 - 3:43 pm: |
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Upping the replacement cost has very little impact on your overall payment. If doomsday scenario takes place, keep in mind that there's tons of unaccounted for costs in a total rebuild, that you aren't considering.
Contractors are re-doing kitchens for $100,000 these days, bathrooms $30-$40k (the good contractors, at least)..good luck finding one to rebuild an entire house for $400k in the quality these homes have been built.
Xavier has got this one right....I'd love to see Greenetree sitting on a pile of rubble with a insurance check in-hand, explaining to the contractor that it's the replacement cost of the materials to be quoted, nothing more nothing less.... |
xavier67
Citizen
Username: Xavier67
Post Number: 649
Registered: 6-2002
| | Posted on Friday, May 19, 2006 - 4:24 pm: |
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Our Chubb premium is $1,845. When the new appraisal came in, I upped the deductible to $2,500 (from $1,000) and reduced the content coverage to 40% from 50% (of $930,000) to keep the premium at $1,845. Otherwise, it would have been $2,365! We're not going to file a claim for small stuff anyway (as not to affect the premium, the insurance ratings, etc.); and we certainly don't own more than $372,000 (40% of $930,000) worth of content!
Regarding replacement costs, I've been told it's cheaper to build McMansions than to rebuild older homes. Just think how much specialized labor you would need to re-build all the plaster walls in your house! And to replace all the interior wood doors, windows, hardware, and other woodwork.
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george H
Citizen
Username: Georgieboy
Post Number: 200
Registered: 8-2005
| | Posted on Friday, May 19, 2006 - 5:47 pm: |
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I was under the impression that replacement costs were based on sq. ft.construction costs for your particular region.I didnt think it was specific to each individual home.I do know that "other structures" is always 10% of dwelling,whether you have other structures or not.If I'm wrong,maybe someone can correct me. |
HKing
Citizen
Username: Hking
Post Number: 4
Registered: 4-2006
| | Posted on Friday, May 19, 2006 - 8:50 pm: |
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How do you determine liability level and/or whether to take out an umbrella policy? I read somewhere that you should make sure home insurance liability is equal to your networth? I'm not sure that makes sense b/c if your networth is 500K but you get sued for 1M wouldn't you lose the 500K liability from the policy and then your own 500K. Also, wouldn't you exclude retirement funds from that calculation b/c I think retirement funds can't be taken in a lawsuit. I find the amount of liability needed for home/auto/umbrella confusing.
More on topic. We have MetLife. They told me that they are the only ones, besides Chubb, who guarantee replacement cost. So, if I get a policy with another well-known firm for the amount required by my mortgage, 312K, in the case of complete destruction, the limit of reimbursement would be 120% or so. Meaning the bank would get their money but my house might not get rebuilt. In contrast, MetLife, forces me to insure at 473K but guarantees replacement -- no matter what actual cost is. I believed the person I spoke with but... |
Rich
Citizen
Username: Veneto
Post Number: 4
Registered: 5-2006
| | Posted on Saturday, May 20, 2006 - 8:44 am: |
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We just got our renewal from State Farm for the exact same policy and the premium the same as yours. My umbrella is only $1MM and the premium is $232. I feel that the company is more important than the cost of the premium. State Farm is a good payer.
The dwelling coverage amount kinda suprised me when we moved here. It seemed odd to insure a house for less than the market value. But I guess the yard is worth a lot more in these areas than in other parts of the country. |
margotsc
Citizen
Username: Margotsc
Post Number: 76
Registered: 7-2002
| | Posted on Sunday, May 21, 2006 - 8:59 am: |
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If you look at your property tax assessments, the land is worth more than the dwelling, which explains the replacement cost calculation. Chubb is known for being top of the line when it comes to payment. No haggling, great coverage but that's why you pay more upfront. We currently have $1MM in a liability umbrella policy for around $100 a year. But we have our auto, homeowners and umbrella with the same company (Encompass) and it gives us both a savings and an "elite" status, as in more coverage. We arranged it through an insurance broker and it seems to be a good deal. |
Bklyngirl
Citizen
Username: Bklyngirl
Post Number: 56
Registered: 10-2005
| | Posted on Monday, May 22, 2006 - 9:41 am: |
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sportsnut: Your numbers sound about right to me. Re: the $400 your were quoted for $2M Umbrella, I was quoted approx. $200 for $1M Umbrella, so $400 for $2M may be correct.
Like HKing, I have Metlife for homeowners insurance, and as I understand it, Metlife will rebuild my house for whatever it costs, regardless of what's listed as replacement cost value on my policy. I don't know whether this is specific to Metlife only, but as my husband reasoned when I brought this issue up, chances are mortgage companies would not allow you to under-estimate the replacement cost of your home.
bklyngirl |
sportsnut
Citizen
Username: Sportsnut
Post Number: 2419
Registered: 10-2001
| | Posted on Monday, May 22, 2006 - 9:45 am: |
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Thank you all. I think after reading through the policy and listening to the advice here I'll probably drop the umbrella policy altogether or reduce it to 1.0M coverage and put the rest of the money towards upping the replacement cost of the house. Then I'll have the agent re-run our car insurance to reflect the discount you get when you combine your homeowner's and car insurance. He neglected to tell me that when he called on Friday. |
Tom Reingold
Supporter
Username: Noglider
Post Number: 14378
Registered: 1-2003
| | Posted on Monday, May 22, 2006 - 9:46 am: |
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I'm paying almost exactly the same as you, sportsnut. Our home values are about the same. I don't have fancy cars as you do, so maybe you're paying about the right amount and I'm paying too much.
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Bklyngirl
Citizen
Username: Bklyngirl
Post Number: 59
Registered: 10-2005
| | Posted on Monday, May 22, 2006 - 9:54 am: |
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I'd reduce the Umbrella to $1M, but I certainly wouldn't drop it.
bklyngirl |
sportsnut
Citizen
Username: Sportsnut
Post Number: 2420
Registered: 10-2001
| | Posted on Monday, May 22, 2006 - 10:13 am: |
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Tom - Sorry to have read about your job situation on another thread. Any leads?
Also, I wasn't concerned so much about the amount we were paying more the coverage that we are buying. I loved our old insurance agent - but he retired and this young guy took his place. Since then (about three years) I haven't trusted him and when we had our homeowner's fiasco last year his first reaction wasn't to help but rather, cover his •••. I don't trust him but I don't know if I have the energy to shop around to find a new carrier. Plus Allstate was the only company that would insure us when we had a underground storage tank. Now that that issue is cleared up maybe its time for a change.
As an aside - does anyone know how long it takes to get a NFA letter from the state? |
Tom Reingold
Supporter
Username: Noglider
Post Number: 14381
Registered: 1-2003
| | Posted on Monday, May 22, 2006 - 10:16 am: |
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Thanks, sportsnut. I don't know if it's rational, but I'm extremely optimistic about landing a good job quickly this time around. I got laid off Tuesday, and I've already had three interviews, and I have another one tomorrow. I'm very excited about the job I interview for tomorrow.
I have a "job search" thread in the blog section of MOL.
I can recommend my insurance agent. No sleeze.
Bruce Roddy
Whitney Roddy, Inc
430 Broad St
Bloomfield, NJ 07003
973-743-6700
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