Annual Homeowners Policy Checkup

[TLuke]

With the cost of building materials skyrocketing the past two years, some affected by disasters (Colorado, Kentucky, elsewhere) are just now finding out that their homes were underinsured and will have to eat the difference to rebuild. Some examples in a recent article I read were quite staggering. Do you sit down with your agent every year to discuss how much it will cost to rebuild after a partial/total loss and adjust your policy accordingly? My former agent in Nebraska was very good at providing a detailed estimate every year of what it would cost to replace the house. Naturally my increased premiums reflected this fact.

 

[MattyD-MPLS]

It is awesome to hear your agent does that for you. Communication is key.

 

[Acesteve]

i was with one of the big boys in insurance for years and they just jacked the value of my home each year. one day I looked down and said what the y, they have my house insured for $300,000 more then I could sell it for. Changed insurance companies becuase and new agent has a conversation.

 

[Luchnia]

Yes, I do evaluate them, but not every year. I have a good agent and we do communicate well. I did raise my policy, but wow...the costs can really get me, but when I think about replacement I calm down.

 

[MattyD-MPLS]

i was with one of the big boys in insurance for years and they just jacked the value of my home each year. one day I looked down and said what the y, they have my house insured for $300,000 more then I could sell it for. Changed insurance companies becuase and new agent has a conversation.

Hey Ace, What you can sell a home for isn’t always the same number as what you can rebuild it for. Sometimes the land is worth a lot of money(lake shore or in desirable neighborhood) and the home can be insured for less because you don’t replace the land, just the structure. Sometimes you buy a home in a less than desirable neighborhood and you pay $120,000 for a 2200 sqft home. There is 0 % chance you can rebuild that home for $120k.

Glad you found someone that had a conversation with you. Inflation protection can get a little out of hand if you don’t pay attention to it. That’s why we will redo the replacement cost calculator with our clients on a regular basis!

 

[MattyD-MPLS]

Yes, I do evaluate them, but not every year. I have a good agent and we do communicate well. I did raise my policy, but wow...the costs can really get me, but when I think about replacement I calm down.

You have to look at the whole picture and I am glad you can see that!

 

[hadi05]

We have/do look into building costs to replace our home and do so every 2 years

 

[Luchnia]

You have to look at the whole picture and I am glad you can see that!

A while back I was looking at the policy and noticed they had around 15 grand for my front porch (policy doesn't call it a porch, they have some other term for it). I told my wife there was no way we could ever replace it for 15 grand. The columns would cost about half that much, so I had them increase it to what I felt like I could replace it for.

This past year I had to replace a front window (4 special arched windows) and each window cost a bit over 5 grand whereas years ago they were 1200-1500 dollars. If you don't stay up on these things, they can bite you bad if something happens.

 

[MattyD-MPLS]

A while back I was looking at the policy and noticed they had around 15 grand for my front porch (policy doesn't call it a porch, they have some other term for it). I told my wife there was no way we could ever replace it for 15 grand. The columns would cost about half that much, so I had them increase it to what I felt like I could replace it for.

This past year I had to replace a front window (4 special arched windows) and each window cost a bit over 5 grand whereas years ago they were 1200-1500 dollars. If you don't stay up on these things, they can bite you bad if something happens.

Agreed, trying to save a couple hundred bucks could cost people hundreds of thousands in the end.

 

[Acesteve]

A while back I was looking at the policy and noticed they had around 15 grand for my front porch (policy doesn't call it a porch, they have some other term for it). I told my wife there was no way we could ever replace it for 15 grand. The columns would cost about half that much, so I had them increase it to what I felt like I could replace it for.

This past year I had to replace a front window (4 special arched windows) and each window cost a bit over 5 grand whereas years ago they were 1200-1500 dollars. If you don't stay up on these things, they can bite you bad if something happens.

I feel your pain. I have a wall of windows in back of my house and some of the windows are leaking. I ordered a set of upgraded windows and indeed your cost of $5K per decorative window is very believable; painfully so. to boot, mine are taking an extimated 1/2 year to get.

 

[Luchnia]

I feel your pain. I have a wall of windows in back of my house and some of the windows are leaking. I ordered a set of upgraded windows and indeed your cost of $5K per decorative window is very believable; painfully so. to boot, mine are taking an extimated 1/2 year to get.

I took me almost about 3/4 of a year to get this window replaced and it was hard to find anyone in my area that would do it! I called place after place and got run around after runaround until finally found a glass dealer in the area that took it on.

 

[Acesteve]

don't mean to be debbie downer, but as this pandimic rages on I continue to see quality of life impacts from what we used to have that I wonder how many years to decades after the end of the pandimic it will take us to recover. to the post on home replacement, can anyone really say what it would take realisticlly to rebuild a house right now? that assumes you can get someone who needs and wants to work.

 

[GoldenBuff]

Good advice. My sister lost her home — complete destruction — in the CO fires. The insurance aspect will be tough.

I looked at our policy, and it is at about 50% of the current value. I need to check in with my agent.

 

[Daddio]

Thanks for the reminder, it's been three years since we re-evaluated, costs have sky rocketed recently.

 

[hadi05]

We also video record everything in our home and keep a copy of it in a fire proof safe. This way we have proof of the contents in the home too.

 

[donny475]

With in the last 2 weeks, we have evaluated and changed some things in our insurance policies across the board. Vehicles and home nd have adjusted, increased and changed companies...

 

[RealPretendPsychic]

Definitely a good idea. My parents had a total loss on their home last year and rebuild costs were significantly more than they were insured for.

 

[O'Carroll]

It’s kind of crazy in this economy for sure. Alyssa and I closed on our new construction house on 1/20/21, so two weeks short of a year ago now. And building the same house, with the same builder, right now just the base price (without upgrades) of the house is up 26%. In just one year. We have our homeowners on my desk, and the premium has increased, so I’ll be sure to understand exactly why.

 

[J4U]

This is good advice as we went through this calculation when we changed insurance companies.

Premium was getting rediculous based on current world situations. I looked through the policy and not only was the replacement cost too low. The new premium was going up over $1000/yr higher.

Never really thought about it before until it jumped so much.

I then started looking at Auto, life ... basically all the policies.

Glad I did as the new policy was just over half the cost of the previous company with corrected numbers and same coverage, blew my mind. Auto and life also dropped significantly!

Pain in the butt, but think I will be shopping all the policies at least every other year from now on.

Not just to make sure the coverage is correct, but to insure I'm getting correctly priced coverage's.

 

[Acesteve]

when I switched in 2020, I realized that my prior agency had never allowed my boat to depreciate. Apparently that is standard in all insurance agencies as told to me by my new insurance company. but, I was told that if the boat was a total loss an insurance agency will only pay the value of the boat not what it was insured at. I'd assume this might apply to RV's and other things. as said before, good idea to meet with you agent every year or so and to ask questions.

 

[fuffle master]

I’ve been in this business for over 20 years now and as @MattyD-MPLS has stated the value/selling price of your house and what you need to rebuild is not the same number. Also, for many keep in mind that in 90% + cases you will never have a total loss. I have had only two total loss payments on house fires out of hundreds and hundreds. Of course, PA doesn’t have the risk of many causes of a total loss, so you have to keep that in mind.

What I have seen in our area is that the home values are increasing much higher then the rebuilding costs. Yet, it’s always good to speak with your agent yearly. We all have many life changes and our insurance needs will change accordingly.

Once you find that agent/company you are happy with, I would be careful of just shopping around for the lowest price. You would be surprised how different each company looks at claims and what they are willing to pay out on. Fire, sure that’s an easy one. Argue about having hail damage on your roof is a whole different situation per each company.

 

[kiwichris]

This is something I am totally looking into since everything happened. May have to expand to shopping around for new insurance providers as well, even if my current company has been very good with the claims we've put in.

 

[J4U]

I’ve been in this business for over 20 years now and as @MattyD-MPLS has stated the value/selling price of your house and what you need to rebuild is not the same number. Also, for many keep in mind that in 90% + cases you will never have a total loss. I have had only two total loss payments on house fires out of hundreds and hundreds. Of course, PA doesn’t have the risk of many causes of a total loss, so you have to keep that in mind.

What I have seen in our area is that the home values are increasing much higher then the rebuilding costs. Yet, it’s always good to speak with your agent yearly. We all have many life changes and our insurance needs will change accordingly.

Once you find that agent/company you are happy with, I would be careful of just shopping around for the lowest price. You would be surprised how different each company looks at claims and what they are willing to pay out on. Fire, sure that’s an easy one. Argue about having hail damage on your roof is a whole different situation per each company.

So agree, especially on the hail damage!

Fought for two years with the previous company for a new roof. Won't get into details, but over priced and lack of service was frustrating. Houses all around getting replacement or partial roofs and nothing for us

The rediculous premium was what pushed me over the edge. Ended up refinancing and getting a new roof ourselves. Perfect timing really for everything to come to a head. Other areas of the house got some improvements too.

I was happy with the agent we had, he is a member here too. It was the mega company that I had an issue with.

Don't always go with the cheapest rate, I'm in agreement there too. When/if a claim is needed the promises made may not hold value. Very easy to promise lower rates and take your money, but so hard to get claims paid by some companies.

 

[Acesteve]

This is something I am totally looking into since everything happened. May have to expand to shopping around for new insurance providers as well, even if my current company has been very good with the claims we've put in.

i resisted changing from my prior agency of ~25 years in spite of contant increase because they treated me well in my 2 claims. then when COVID hit some things were done to my policy and premium without my consent that basically called me a lier. I called the office and told them i felt violated and to let the owner know. No response and I'd bet owner was not even told or if he was it was a backoffice decision and he was just an agent. So I was upset and started shopping. I went to my friends and asked for recommendations and claims history. I got one good lead, priced it and took it. The thing that surprised me was that my new agency went about recommending coverage that was quite different from my prior national mega company. 18 months into it I'm pleased.

 

[kiwichris]

i resisted changing from my prior agency of ~25 years in spite of contant increase because they treated me well in my 2 claims. then when COVID hit some things were done to my policy and premium without my consent that basically called me a lier. I called the office and told them i felt violated and to let the owner know. No response and I'd bet owner was not even told or if he was it was a backoffice decision and he was just an agent. So I was upset and started shopping. I went to my friends and asked for recommendations and claims history. I got one good lead, priced it and took it. The thing that surprised me was that my new agency went about recommending coverage that was quite different from my prior national mega company. 18 months into it I'm pleased.

Thanks for this, makes me want to explore more insurance agencies. Currently exploring policy genius services for finding quotes & coverage.
Interestingly my current dwelling replacement cost is $200k less than what policy genius it possibly should be.....