Homeowner insurance (short sale, real estate market, homeowners insurance)

[nnyl]

Just curious as to what others have done, if anything.

My homeowner insurance is up for renewal. The company is quoting the rate based on property value from 3 years ago (when this company first got my business for homeowner insurance). They will adjust it, or talk to me about same.

Have others of you, since property values have plummeted in this state, lowered your dwelling coverage to reflect the loss of property value?

[EricBoyd]

I thought homeowners insurance was based on replacement cost, not property values. ???

[dspenc8888]

BCBS of FL has the Florida Blue store now in St. Johns Town Center. They are now offering good individual high deductible plans and even have kiosks at CVS and Winn Dixie with info.

[EricBoyd]

Originally Posted by dspenc8888

BCBS of FL has the Florida Blue store now in St. Johns Town Center. They are now offering good individual high deductible plans and even have kiosks at CVS and Winn Dixie with info.

I'm pretty sure BCBS only does health insurance, not homeowners insurance.

[nnyl]

Originally Posted by EricBoyd

I thought homeowners insurance was based on replacement cost, not property values. ???

Therein lies the problem. If my home is now only worth 70% of what it was 3 years ago (or some other arbitrary percentage), isn't that ostensibly it's "value", replacement or otherwise?

[EricBoyd]

I don't really see it as a problem. What if your house burns down and your insurance policy only covered the "market value", yet it costs $50k more to rebuild it? Where's that additional $50k coming from? Oh, and I didn't think about your mortgage balance. I bet your mortgage company doesn't want to eat the difference between the "market value" and the "mortgage balance". (ok, maybe that's a bad example in today's short sale market) LOL I'm no insurance expert, so there's a slight chance I have no earthly idea what I'm talking about.

[nnyl]

Originally Posted by EricBoyd

I don't really see it as a problem. What if your house burns down and your insurance policy only covered the "market value", yet it costs $50k more to rebuild it? Where's that additional $50k coming from? Oh, and I didn't think about your mortgage balance. I bet your mortgage company doesn't want to eat the difference between the "market value" and the "mortgage balance". (ok, maybe that's a bad example in today's short sale market) LOL I'm no insurance expert, so there's a slight chance I have no earthly idea what I'm talking about.

Thanks for the input EricBoyd.

The mtg balance is in fact, less than what the home is valued at, by the ins. co. And I would certianly never expect a mortgage company would agree to an insurance policy less than what is owed on the property. That wouldn't happen, and I know it.

I guess the angle I was shooting for, goes something like this. We are all, or most of us, suffering from reduced values (supposedly) on our homes, after the real estate fall-out. We are all, additionally, living on reduced incomes, or a lot of us are (myself included).

Why should I have to pay the insurance company, the same monies I was paying 3 years ago (in fact with rate increases even more), with the house valued at it's same same value of 3 years ago. The home is *ostensibly* not worth that same *inflated/bubble* value.

The home, it's replacement cost, I have no idea what that would cost actually, none. In that area I am clueless. I know that if I tried to "sell" the home, the value they have it placed at, is right about where it should've been before the bottom fell out of the real estate market.

Obviously, in today's economy, homes are no longer worth that. But would it cost less than that to replace it? To rebuild it? I wouldn't even know where to begin to look at such.

I have decided, however, to leave it alone. Because, my house is old, more than 50 years old. I have a rough time in this market (FL) trying to even find anyone to cover the home.

If I go rattling too many tree branches, I just might have an inspector on site and a "reason" to cancel my coverage. And then I will have cut off my nose to spite my face.

So I guess, best left alone.

[travelingfood]

Learn about replacement cost.
Learn about Replacement Cost

It's a good thing the policy is covering more than the current market value.

[EricBoyd]

Yeah, I definitely understand your position. Have you tried calling your insurance agent just to throw some "what ifs" at them? That can't hurt. They're salesmen, too, so if there's a chance they may lose a customer there may be an opportunity to do something better for you. But, I do agree that you shouldn't go shaking too many branches. With your home being as old as it is, you may have an issue with getting new coverage. Risk assessment is part of the insurance companies procedures.

[nnyl]

Originally Posted by EricBoyd

Yeah, I definitely understand your position. Have you tried calling your insurance agent just to throw some "what ifs" at them? That can't hurt. They're salesmen, too, so if there's a chance they may lose a customer there may be an opportunity to do something better for you. But, I do agree that you shouldn't go shaking too many branches. With your home being as old as it is, you may have an issue with getting new coverage. Risk assessment is part of the insurance companies procedures.

I did call him, but subsequently decided to leave well enough alone. As he cautioned, and I'm well aware already, the home's age precludes many carriers from interest in insuring it.

The home has new plumbing, numerous upgrades, but it has never been re-wired electrically. That, a biggie, for insurance cos. And so, as I said, go rattle too many cages and I just might get bit.

It is an interesting topic to look at though. I mean, for instance, condos that were once selling upwards of $200k are now being had for $90k, in some places in this city, in these hard-times. Obviously the builders of these condos are able to do so somehow. So, are some who bought those properties at the high-end, insuring them for the $200k price, when their neighbor in the next unit is only paying for $90k worth of coverage.

Makes ya go. Hmmmm..........