Misty L
 |
A lot of Insurance companies, depending on the state/company, have an automatic 3-4% increase factor built into the policy. Yours obviously doesn't. All you have to do is call you Agent and tell me you feel it is underinsured. As your agent, they should have picked up on that for you by now! We review everyone's policy every year. Its a lot of work, but that's why we retain as much of our business as we do! Right now, to build it is approximately $75-$95 per square in the state of Texas. Depending on the coverage your'e looking for and the area you're in. Just give them a call. Most of the time there shouldn't be an appraisal needed! They have programs online called "Replacement Cost Estimators" that they can run to determine the RCV. |
mbrcatz
 |
Well, you have a rotten (or lazy) agent if they let you insure it for the appraised value.
"Appraised value" is market value. Banks and real estates use it. "Insured value" is cost to rebuild. Insurance companies use cost to rebuild. If the cost to rebuild the house was, say, $200,000, and the appraised value was $100,000 (common with old houses that have lots of hand carved woodwork and detailing you just can't get these days), then right off the bat you would have been 50% underinsured.
Which MEANS, if you had a kitchen fire, with $20,000 damage, the insurance company would have paid . . .. $10,000. 50%. The percentage that you insured your house for.
Which is why I think you IMMEDIATELY need a new agent. They need to come out to the house, and do a "square foot estimator" to calculate the current cost to rebuild. You need to increase to that amount RIGHT AWAY.
Insurance companies usually want you to insure your house from between 90% to 100% of the cost to rebuild. If you underinsure, they only pay out the percentage that you insure (not quite accurate, but it's a formula I don't want to go into here). They don't want to OVERINSURE, because then you have a reason to burn down the house.
The appraisal is completely unnecessary. A good agent will make the calculation for you.
At that time, you should really sit down with them, and discuss the following options: Replacement cost on the dwelling & contents, Building & Ordinance endorsement, any specialty collections you might have, jewelry, coin collections, etc; deductible credits, package credits, alarm credits, and any update credits that might be available. |
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