What do you know about Homeowner's insurance?

[C.Ann]

Yesterday I was going through some papers and came across our homeowner's policy and suddenly realized that I really don't know anything about it!

Every year - when the policy renews - the dollar value of our house and our place at the lake goes up.. I'm assuming they base that on a general rise in the cost of housing.. However, I've noticed that the value of our place at the lake is much higher than it's probably worth - and the "contents" is DEFINITELY higher than what we have there..

If anything were to happen to our place at the lake (like God forbid a lightning strike that burned it to the ground - as happened to one of my neighbors up there the summer before last) would they really pay out all that money? I find it odd because aside from when we first insured it (and all I had to do was to provide them with a photo of it) they don't have a clue what the place looks like - or is worth - and for all they know I could have NOTHING inside..

How do they make those determinations? Should I be doing something else in terms of my house and the lake house - lke taking photos inside and out - as well as photos of our belongings - or what?

Can't believe this never occured to me until now, but I guess I just never really stopped to think about it until I realized how high the values had gone compared to when I first started the insurance policies..

 

[DMRick]

However, I've noticed that the value of our place at the lake is much higher than it's probably worth - and the "contents" is DEFINITELY higher than what we have there..

Your insurance company is the best one to talk to about this (mine is a wealth of info)..and that said:

In our area (which is your area LOL), the amount you are insured for is what it would cost to rebuild it, not what you could sell it for. In the area of your lake house, I'm sure you realize it's expensive to build there. The contents are a percentage, as would be any garage..even a junky old shed that passes for a garage. We have replacement (costs a little extra) on our homeowners, which means if my 15 year old fridge burns up in a fire, I get a new one, not just the amount of the value of the 15 year old one. We had a chimney fire one year, and found out just how good the replacement homeowners is...I have a nicely re-done kitchen with a much nicer built in wood stove, than I originally had.

 

[KimRaye]

All good questions, to which I have no legal answers, sorry. BUT,

Originally posted by C.Ann
How do they make those determinations? Should I be doing something else in terms of my house and the lake house - lke taking photos inside and out - as well as photos of our belongings - or what?

I have heard that when making claims to JUSTIFY payouts or, for OVER the amount of insurance, that pictures are helpful for contents, etc. but, I have no first-hand experience, thankfully.

If you're just concerned with lowering your premiums, I'd advise your agent to do that, depending on what YOU think everything's worth, replacement-wise. And, you might consider raising your deductible also.

Hope someone else can help.

 

[C.Ann]

I've always hated the way insurance policies are written - they're SO hard to figure out..

Having said that though, I'm not concerned about the premiums as I actually think they're quite low for the coverage I have..

I may have to nosey around on their web site and see if the language is any plainer..

Also - when they determine the value to "rebuild", what happens if you decide NOT to rebuild? My friend up to the lake went with a modular after her place burned down and it was MUCH less expensive than actual stick rebuilding.. But what would have happend if she just said the heck with it and didn't want to rebuild at all? (Totally off-topic, but she was just had the modular set in place and finished late last fall.. Hasn't used it yet and now she's battling stomach cancer.. )

 

[DMRick]

You don't have to rebuild..but I think you would be shocked at the cost of taking down and away! You can pocket the money, use some to go along with whatever the code is, and then sell the "blank" land (all this assuming there is no mortgage..the bank has a lot to say in this..if you have a mortgage, they may get to "hold" your money, until you either pay off the mortgage, or rebuild).
Some people think the money is better than rebuilding..hence the "jokes" about "Uncle Louie".

 

[mudnuri]

well, we've never had to use our insurance policy, however we have ours done this way.

House insured at 2.5X the selling rate- (enough to rebuild with better materials)...contents insured under 'bulk' of contents policy..

then we have riders....they are as follows..
jewlery- anything of ours with value....my rings, DD's necklaces, earings etc..
guns- DH's guns are insured on seperate rider
collectibles- any and all hummels, are insured here

then I have all of the information from each piece of electronics that we have in our safe deposit box...A picture, and also the serial# brand, and amount paid and when...

This also includes our appliances, since we've swapped over to Kenmore Elite's- they are $$$ to purchase, none of them are over 2years old, so it's very important that they know exactly what fridge I have....

In the winter, when I take the road insurance off my motorcycles, I leave Comprehensive...and also add a rider to my house insurance..this will cover the bikes in every way.

My insurance, due to a multiple policy holder, (2 motorcycles, 4 quads, 4 cars & house,) runs about $400.00 per year...house is insured at $250,000.00 All the other stuff I'm not sure what it equals, but we had everything of value appraised (written) and have given copies to insurance agent, and have originals in safe deposit box...

Brandy

 

[flrose]

C.Ann-for your own benefit you should take pics inside and out and keep them in a safe place along with an inventory of your contents. Most policies: if you have a total loss won't pay total replacement cost if you decide not to rebuild but, a % of the face amount. (This is to keep people from torching their own place for the ins $) Also, most policies no longer have Guaranteed Repl Cost on the building itself and will pay only up to the limit shown on the policy. Your coverage amount may be higher than actual cost to rebuild due to the automatic inflation that is applied to policies each year. Take the sq ft of your home and go to your agent and have them refigure the value of your home. Or, have it appraised by a property appraiser (which will cost you). You will have to sign to reduce your coverage anyway, if necessary.
As far as your contents coverage most policies come with a built in % of the building amount and can be increased but, not reduced.
Hope this helps some. And to think a few years back insurance policies were rewritten to be consumer friendly
, but they are still hard for the average consumer to figure out due to all the if, ands or buts.............Good Luck!

 

[Kermit]

Originally posted by C.Ann
Should I be doing something else in terms of my house and the lake house - lke taking photos inside and out - as well as photos of our belongings - or what?

Yes, you should take pictures of your belongings and keep them somewhere else. That's good for the insurance company and your own benefit. It would make it easier to remember everything that you had.

 

[C.Ann]

Originally posted by flrose
C.Ann-for your own benefit you should take pics inside and out and keep them in a safe place along with an inventory of your contents. Most policies: if you have a total loss won't pay total replacement cost if you decide not to rebuild but, a % of the face amount.

--------------------------------------------

That's the one of the parts I was wondering about because I thought I read that - or heard that - somewhere before.. When Kate's place burned to the ground she considered not rebuilding at all, (she's in her 80's), moving to Florida (she has family and friends there) and purchasing a home instead.. She has a son up here though and he convinced her to go with the modular home.. I remember how upset she was in dealing with the insurance company but I never got into any of the specifics with her..

 

[DMRick]

I remember how upset she was in dealing with the insurance company but I never got into any of the specifics with her..

In NY, you can actually hire someone to "fight" the insurance company for you. They get a percentage, but they also usually get more from the insurance company.

You should have a video of each room, and as mentioned, riders for items that are above the amount the insurance company allows.

 

[Disney Doll]

My DH always said that with homeowners you have to think of what it would cost you to replace your home TOTALLY, including furnishings, clothing, etc, not just the rebuilding of the actual structure. Remember, if God forbid your home was destroyed by fire, all your furniture, clothes etc. would be destroyed too.

That being said, if that amount of money is too high for you to be able to afford the premiums,. then insure it for what it waould cost to pay off your mortgage and have a decnet downpayment for another place to live.

 

[DMRick]

That being said, if that amount of money is too high for you to be able to afford the premiums,. then insure it for what it waould cost to pay off your mortgage and have a decnet downpayment for another place to live.

I don't think it works that way. If you are only insured, for instance for 40% of what the insurance company felt would be accurate, if you had a fire, you might only get 40% of the damage. Since damage is seldom 100 of the structure (for instance, you seldom get the percent that would be the land it's on), you already wouldn't get 100% even if insured for 100%. It's expensive to remove a damaged structure..you don't want to take a chance on having enough for the mortgage (they would get paid first), and not enough to clean up the mess, let alone move or rebuild.

 

[Dan Murphy]

I searched for a simple explanation, the Snoopy dog place has a pretty good one..............

http://www.metlife.com/Applications/Corporate/WPS/CDA/PageGenerator/0,1674,P1877,00.html

Best advice though, talk to your agent. If you do not like or trust agent, get a new one.

 

[mudnuri]

If you do not like or trust agent, get a new one

LOL, this made me think of a time last year...

Our agent lives in our neighborhood, and we drive by her house every day to get off the hill...anyway- we're out having dinner last winter, after the major storm on NYE/Day. and she says "remember to clear your roof off"...so I say "geez, what it is this a do as I say not as I do thing?"...she started laughing..her roof had just as much snow on it as mine.

I just had to call her last week, DH's windshield got a stone chip- which actually cracked...so we couldnt do the drill/fill thing. I called to see if it was worth it to go through the insurance or not. never felt as though I had too. but with a $50.00 deductible and a $380.00 windshield, I didnt have to think too hard.

We have had this agent for quite awhile, and every now and then I'll get a quote from other agents just on our cars to see what the price difference is, and she's always lower.

I agree though Dan, it's like a hairdresser, if you dont trust them, find a new one!

Brandy

 

[C.Ann]

Thanks for all the great responses here..

No problems with trusting my agent.. We've had him for years and years, as did my parents.. I was just amazed to discover how little I really knew about homeowner's insurance when I actually took the time to read the policy..

I still think they could write the policies a little clearer (and that goes for auto and life insurance as well..).. All the "if's", "ands", or "buts" are enough to drive a gal nuts!!!