Home Insurance

[mavendrill]

I am thinking about this quite a bit, and curious about coverage and rates various folks have.
The current building supply crunch is making me rather uncertain about what my rebuilding costs would actually be and thus how much insurance I actually need.
Currently I am at: $300k coverage on a 2100 sq ft ranch in HCOL colorado and pay 1600 per year. 

would love to hear others ideas.

[Dicey]

When I bought my first house, my dear insurance agent uncle taught me one should only insure the structure, because the land doesn't typically go away in the event of a disaster.

Fast forward to this century, and insurers have gotten wise to this. They generally will not allow you to buy insurance for the structure only. In fact, we bought two houses for below market in 2015-2016 and our agent insisted the coverage be for more than we actually paid for the property. It helps that she's a damn good agent and found us insurance at an excellent price, but it still pissed me off that we were paying for more coverage than we would ever receive. Fast forward to 2022 and each of those properties have nearly doubled in value. Replacement costs are up like crazy. Guess who's not complaining now?

You didn't mention when you bought it or what the replacement cost might be. Colorado is experiencing a huge boom. You could well be underinsured.

BTW: Our agent dug up a well-rated company that specializes in insuring people in my husband's field (Civil Service). It's the best damn company you've probably never heard of. A good independent agent can be worth their weight in gold.

[patchyfacialhair]

You're probably underinsured on that size of house.

I'm in Colorado Springs, and my pretty-much-up-to-date valuation of the estimated minimum cost to rebuild is $580000. My home is between 2500-3000 sqft above ground (2 stories), unfinished basement. It's your typical late 90s/early 00s mcmansion tract home.

So applying that to your 2100 square feet, you probably need to be more like $450k to be in the ballpark. More if you're in Denver/Boulder/Ski Towns.

Insurance companies these days are pretty heavily regulated in this regard in Colorado, ever since the big fires in Colorado Springs, and amplified by the recent one outside Denver/Boulder earlier this year. Also, your policy typically has a boost of some sort in the event that supply chain issue, code changes, etc. drive up the rebuild cost of your house.

[uniwelder]

You should take a look at the deductible. Taking mine from $500 to $5,000 brought my rate down by half. I don’t intend to file a claim unless there’s a major disaster.

[Dicey]

You should take a look at the deductible. Taking mine from $500 to $5,000 brought my rate down by half. I don’t intend to file a claim unless there’s a major disaster.

Excellent tip!

[clarkfan1979]

I am thinking about this quite a bit, and curious about coverage and rates various folks have.
The current building supply crunch is making me rather uncertain about what my rebuilding costs would actually be and thus how much insurance I actually need.
Currently I am at: $300k coverage on a 2100 sq ft ranch in HCOL colorado and pay 1600 per year. 

would love to hear others ideas.

Paying $1600/year for 300K of replacement cost in Colorado seems a little high but not outrageous. I have been increasing my replacement costs on my policies. I pay around $1100/year for similar coverage. However, I have a $2500 & $5,000 deductible.

I have a house in Hawaii and recently increased the replacement cost from 575K to 850K. When I read through the policy, the recommended coverage was 920K. The policy says $150/sq. ft. to replace the garage, $200/sq. ft. for the basement and $300/sq. ft. for regular living space. 

I objected to the replacement cost of the basement. At 600 sq. ft., that would be a replacement cost of 120K. I gutted and re-did the whole thing in 2018 for 27K, hiring out 75% of the work. If I hired out 100% of it, final cost would be 35K.

I really don't understand how a garage with it's own roof is only $150/sq. ft. and a basement without needing an additional roof is $200/sq. ft. Instead of going with the recommended 920K policy, I went with 850K for replacement cost.

[Mr. Green]

Our insurance company (State Farm) automatically insures 125% of the declared value to cover the possibility of increased replacement cost during a mass casualty event. We're on the Atlantic coast though where hurricanes are a thing. If I were not in location where the whole area could be wiped out at once I wouldn't mind being slightly underinsured, but with the crazy building supply fluctuations of the last 18 months, how do you get an accurate handle on that number?

[sonofsven]

I'm paying just over $1200 for $350k home coverage and $75k outbuilding coverage with USAA; my deductible is $10k.
If my house burnt to the ground I'd rebuild it myself and make money in the deal, but it would be tough to hire someone else and stay in budget at those numbers

[paulmose0]

I am finishing probate this week on a 3 bedroom, 1 bath rental property in WVa.  My mother left it to me when she passed in March. Nice suburban house with long-time renters.  My 91y/o stepfather used to do the maintenance.  It appears that appliances break and have to be replaced frequently because he always bought the cheapest items and installed himself.
As I am on the west coast (although planning to use this house as a retirement home in 2026) I am looking to purchase insurance that will cover some maintenance costs-basic plumbing, appliance replacement, etc for the next year or two.  I am not wanting to displace the older tenants who are there, yet want them to be preparing to move in the next 24-30 months.
Is there a market for this kind of insurance?  I would appreciate some input on this as I have only been involved in homeowner insurance from an escrow situation and this house is paid for (value most likely 100k  max).

[sammybiker]

My experience with my rental portfolio: the appliance/home warranty products that may cover what you're looking for often fall short or will put out one covered claim and restrict heavily on future.  For coverage over the next couple of years, I would look into sourcing a handy person that can provide local help to minimize cost but also not waste time/money/frustration with any sort of insurance the claims to provide the coverage you're desiring.

I'm a long distance from my portfolios, so I understand your apprehension/wanting peace of mind for yourself and your tenants...but for low cost protection that you're looking for (appliances, plumbing) that actually has value does not exist in my experience.  If it did, all of us rental property folks would have it.  Insurance companies, especially the home warranty sector, are there to make money and I would be careful.

YMMV.

I am finishing probate this week on a 3 bedroom, 1 bath rental property in WVa.  My mother left it to me when she passed in March. Nice suburban house with long-time renters.  My 91y/o stepfather used to do the maintenance.  It appears that appliances break and have to be replaced frequently because he always bought the cheapest items and installed himself.
As I am on the west coast (although planning to use this house as a retirement home in 2026) I am looking to purchase insurance that will cover some maintenance costs-basic plumbing, appliance replacement, etc for the next year or two.  I am not wanting to displace the older tenants who are there, yet want them to be preparing to move in the next 24-30 months.
Is there a market for this kind of insurance?  I would appreciate some input on this as I have only been involved in homeowner insurance from an escrow situation and this house is paid for (value most likely 100k  max).

[paulmose0]

Thanks

[meandmyfamily]

I have had same experience as sammybaker with warranty companies.  They aren't worth it.