| cardboard - 3/2/2015 15:42
There has been a few house/shop fires in our area lately. Got me wondering what your home is insured at? Full value to rebuild or a certain percentage? For example, say it would take $200,000 to build new. What value would you have it insured at? Just curious how others do it.
If you are under 100% of replacement cost, you are underinsured, and if a loss happens, you'll be charged a co-insurance penalty.
Example
Let's say your house is worth 100k
You have it insured at 80k - 80% of RC
Ohh, and we have a $1k ded
Hail storm comes, totals your roof, and it's going to cost 10k to fix it.
Since you are only insured at 80%, you are taking on 20% of the risk.
So, here is your check for 7k - 1k towards your deductible, 2k in co-insurance penalties.
It's a real thing, and it's unfortunate. The worse problem is are the folks that live in town that bought their house for 40k. They always ask why is it insured for 150k when I can just buy another one, as they just don't understand replacement cost. |
Home Insurance
