Wanted: Insurance Advice

Any of you cool cats out there know anything about proper insurance coverage for a house? Because I’m looking at switching my insurance, and the new company says I’m really under-insured. I don’t want to be under-insured, but I’m not sure I want to be over-insured, either. Right now I’m insured for about 1.06 times the appraised value of the house. New company says I should be more like 1.73 times the appraised value. That’s a big difference, no? FYI, it’s an old farmhouse–part of it from 1830s, perhaps, part of it from late 1800s.

Any and all advice would be appreciated.

5 thoughts on “Wanted: Insurance Advice”

  1. Voters
    I suggest asking Tim Voter. the one thing I know about insurance is you want it to be to replace what you have lost. They had a fire, and were required to write lists of everything they lost (down to cans of food) and their estimated DEPRECIATED value. You want to avoid that, and know that if your house catches fire you have an assigned amount you will get. I can’t even tell you what the different names are, but I talked to my agent after that to be sure we have the right kind.

  2. The proper amount of insurance doesn’t necessarily correlate with the appraised value of the house. You need to insure for what it would cost to rebuild the house if it were destroyed.
    The appraised value is approximately what you could sell it for. The cost to rebuild could be less than that, if property values in your area are high. But the rebuilding cost could be a lot more, depending on labor costs, material costs, etc. So 1.73 times the appraised value is not necessarily out of line.
    So ask the new insurance company what they are basing the new insurance amount on. If they say anything other than rebuilding cost, then they don’t really know what they are doing.

Leave a comment