Stump the group--homeowners insurance question

June 1st, 2014 at 10:23:31 AM permalink
AZDuffman
Member since: Oct 24, 2012
Threads: 135
Posts: 18136
I live in a very basic house, a duplex. Total square footage of both units is about 1,300 plus another 650 or so for the basement and garages. It is a 2-floor not side by side type duplex. Here is the problem. Based on replacement costs I have to carry nearly 300,000 in homeowners coverage. Mine is a slightly lower than average middle class neighborhood. No person in their right mind would build at even $100,000 as the median for the town is probably $85K.

However, I can't insure for less per most agents I talk to. They are saying I have to insure to replace. Does anyone know a way to let me insure for just a dollar amount so if there was a total loss I could build smaller or just take a check and walk? I feel I am overpaying by 60% or more as it is.
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June 1st, 2014 at 1:01:41 PM permalink
beachbumbabs
Member since: Sep 3, 2013
Threads: 6
Posts: 1600
Actual loss, or loss of use, won't do you any good, because it's an add-on requiring the homeowner's structural insurance as the primary umbrella. The best suggestion I have is to find someone who will give you a really high deductible, possibly breaking it out for wind damage, or earthquake, or something, into different numbers. (I don't know where you live; here in Florida, I have a 500 deductible for AOG (negotiable), except a 5000 deductible for hurricane/wind damage (negotiable), and something else is at 2% of total value (but could be adjusted). The state mandates the replacement coverage to the best of my knowledge in most places (I've insured in 4 diffferent ones). If that's the law in your state, you can't get them to sell you anything else; it's illegal and can lose them their license to practice in the state.

Assuming you're renting the other half of the duplex, perhaps their rent needs to go up, since they only have to carry renter's insurance, but are benefitting from your homeowner's covering their structure? When I owned a duplex (in a condo association) in Washington State, part of my monthly assessment was to cover the physical structural insurance. It would not be unfair for your renter to pay something similar.
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