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Old 01-26-2008, 10:46 PM
 
Location: Delaware
902 posts, read 3,213,195 times
Reputation: 357

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Summering,

As an insurance agent by training (but not currently "practicing"), I know exactly what you are referring to. Most Homeowners insurance policies, in most states, do offer a specific endorsement be added (at a small premium, of course) which allows for increases in buiding costs under various circumstances.

But you are right, most home owners depend on their insurance agent to properly advise them on those unique situations... and sadly, a lot of agents do not practice that sort of due diligence anymore. Typically, that "additional" coverage only generates about $25 in premium a year, so you can guess an agent's commission on that small amount. I am by no means justifying the agents' lack of ethics, just stating what is quite common in the industry. And that applies to ANY state I personally have lived in and been licensed and employed in the insurance industry.

It IS a scary thought... and I for one do NOT think you are exaggerated the value of READING the fine print!

Mary
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Old 01-27-2008, 07:13 AM
 
Location: Sunshine N'Blue Skies
13,320 posts, read 20,098,378 times
Reputation: 11645
Great information MaryCh.........
I think it is wise for everyone to remember this when they shop for their home insurance.
I wasn't sure they would insure for much more then the home was worth, or thereabouts.
But, if one can, as you state......then it would be worth every penny to ask.
Everytime I passed the empty lot, each year, I would be so sad for the person not able to rebuild on it. Its been a long time, I finally see markers........something will rise up now. Thank goodness.
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Old 01-27-2008, 07:26 AM
 
Location: Delaware
902 posts, read 3,213,195 times
Reputation: 357
One of the biggest issues insurance agents encounter is explaining the difference between MARKET value and INSURANCE (otherwise known as construction) value. Essentially, as we all know, market value can be vastly different on the same structure, depending on the location. Whereas the insurance value brings in to play the actual cost to repair or replace (stick for stick, brick for brick) the structure. While insurance value CAN vary a bit based on location, it IS hard to pass on this concept to consumers AND mortgage lenders and make all parties happy.

This is one BIG reason that, for the 2 years we lived on Long Island many moons ago, I was NOT interested in working in the insurance industry. As NY'er know, real estate prices in NY are out there... because of the proximity to Manhattan. Definitely a different animal, so to speak. Even in NC, mortgage lenders got to where they dreaded the discussion with insurance folks in preparing for closings. And the closer to the water one purchased, the worse the conversations went.

The ones I am always concerned over are the folks that put a large down payment up for secondary properties, and in doing so, the sales/purchase price ends up under the radar in proper valuation. Those folks are more likely to get burned (no pun intended) if something happens to their investment.

Off my soapbox now...
Mary
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Old 01-29-2008, 07:39 AM
 
Location: Sunshine N'Blue Skies
13,320 posts, read 20,098,378 times
Reputation: 11645
Also wondering if it is a modular. Lots of homes here down south are modular homes put up on piers. Some not on piers.
Say someone pays 200 or so for this home, can he insure it for well over that so he is not surprised if down the road something happens?......
The community wants him to put now up a 300,000 home. Insists on it.......
Also people should know about the "assessment' insurance.
If the community needs a new septic, or water lines.......everyone gets a bill.
There is coverage for that also, that is not costly. So if the big surprise comes along.....your covered. It can be thousands.
Interested in your wisdom on the modular homes, very common and harder to get insurance for.
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Old 01-29-2008, 09:56 PM
 
Location: Delaware
902 posts, read 3,213,195 times
Reputation: 357
The issue, from an insurance perspective, of modular and/or mobile (otherwise known as "manufactured" homes is the common theory that they depreciate like cars. Most people understand how a brand new car loses value almost the minute you drive it off the lot, and goes downhill from there. The same concept is applied to manufactured homes.

In more recent years, with regulations changing to close the gap on quality of construction for manufactured homes vs. site built homes, the insurance industry is slowly changing the way they look at "non-site built" structures. I thank federal construction regulations there, as HUD certifies a manufactured home by the same standards and code as site built.

The problem exists in underwriting guidelines from one insurance company to another, and is then compounded by the fact that insurance LAW varies greatly from one state to another. Our home in NC is a prime example of this.. we had a modular upgrade of a mobile home (double wide), on a permanent brick foundation, with all the HUD certifications, etc. The mortgage was a conventional 30 yr loan, and the same as what we would have had with a site built home. The first year we owned the house, we were able to carry homeowners insurance, at standard rates. When it was time to renew, the insurance company had "tightened" their U/W guidelines and re-rated our house as a mobile home. Legally, they were able to do that.

Also, for those folks looking at homes in a community with a Homeowners Association, there are 2 different things to consider. First, as you mentioned, the "loss assessment" coverage on their homeowners policy. Second, when perusing the HOA rules and regs, ASK to see a copy of the Association's policy. The assn should have by-laws, and carrying insurance as an association should be part of the bylaws. This is a fine detail that a lot of people pass over in the frenzy of purchasing the home.

I have known of several property owners, and homeowners associations that end up in court for years over conflicting interpretation of who is responsible for what. And not all mortgage lenders are savvy to all this!

And no, you can not purposely over insure property. Another reason why everyone should read through their policies at least once. Do not depend on an agent to know everything about your situation, as most agents in today's world consider it the policy holders' responsibility to themselves to know what they have.

Gotta run... sorry for stealing the thread and going off on a tanget. Hoefully, I helped you underand a bit more, summerling!

Mary
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Old 01-30-2008, 06:46 PM
 
Location: Magnolia
137 posts, read 281,825 times
Reputation: 170
Mary said:
<<Most people understand how a brand new car loses value almost the minute you drive it off the lot, and goes downhill from there. The same concept is applied to manufactured homes.>>

Whoa, back up a minute!

I knew that mobile homes depreciate the minute they are purchased and moved off the lot. Are you saying that will be true of the manufactured homes purchased and deposited in communities such as Summer Meadow? That is surely something to consider.

Hmmmmmm....
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Old 01-30-2008, 06:50 PM
 
Location: New Jersey/Florida
5,426 posts, read 10,482,745 times
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How is the Dagsboro area in Sussex County for retiring. I was looking at a couple of different houses online. Thanks again JM.
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Old 01-31-2008, 06:44 AM
 
16,199 posts, read 10,545,625 times
Reputation: 28844
Quote:
Originally Posted by sanddollar View Post
Mary said:
<<Most people understand how a brand new car loses value almost the minute you drive it off the lot, and goes downhill from there. The same concept is applied to manufactured homes.>>

Whoa, back up a minute!

I knew that mobile homes depreciate the minute they are purchased and moved off the lot. Are you saying that will be true of the manufactured homes purchased and deposited in communities such as Summer Meadow? That is surely something to consider.

Hmmmmmm....
Hi jonalyn.
that is what they say but if you notice, the resales go for more than they were purchase for so that tells me this is not true in 55+ communities.
We researched for 2 years before we moved looking for a cheaper resale. They all went for more than the new homes.
Now in your average mobile home park, this may be true. But not in the 55+ communities.
If anyone finds one that depreciates, let me know and I will buy it.
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Old 01-31-2008, 06:24 PM
 
Location: New Jersey/Florida
5,426 posts, read 10,482,745 times
Reputation: 3584
Quote:
Originally Posted by JERSEY MAN View Post
How is the Dagsboro area in Sussex County for retiring. I was looking at a couple of different houses online. Thanks again JM.
Ladies sorry to intervene. But I'm asking about Sussex County esp. Dagsboro, not about insurance. Sorry. Spring is on the way.
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Old 02-01-2008, 06:57 AM
 
16,199 posts, read 10,545,625 times
Reputation: 28844
Quote:
Originally Posted by JERSEY MAN View Post
Ladies sorry to intervene. But I'm asking about Sussex County esp. Dagsboro, not about insurance. Sorry. Spring is on the way.
Oh right.............
I'm new to DE myself but Sussex is a nice county just a tad more expensive than Kent.
That is all I can tell you.
anyone else..........
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