Insure for Replacement Cost?

[burghMan]

I was perusing my homeowner’s insurance policy and noticed that my coverage value is based upon the “replacement cost” of my home, which is about 30% higher than the market value. I understand that replacement cost can be quite high, since if the house was destroyed, the cost of me rebuilding my home “from scratch” would be substantially higher than the cost to a tract builder.

However I don’t see the reason to insure my home for more than it would cost to buy. After all, my financial risk is limited to the market value of the home. If the house were to burn to the ground, I could just buy an equivalent house down the street at the market value. The cheapest way to replace my home would be to buy an identical home, which is entirely realistic in my neighborhood. I do have a mortgage, but the balance is less than 80% of the home’s value, so the lender could be made whole with a policy that only covered the market value.

I called my insurance company (USAA) and asked if I could reduce my coverage to the market value. They told me that they would not do this, and that no insurer would sell a homeowner’s policy at less than replacement value.

I’m skeptical. Could I save some money by shopping for coverage that is limited to market value? Or are there other reasons to stick with replacement value?

[LAAFTERHOURS]

I also have USAA and my policy is a bit high (new homeowner). Im considering shopping my homeowners to other vendors.

[LAAFTERHOURS]

I also have USAA and my policy is a bit high (new homeowner). Im considering shopping my homeowners to other vendors.

[LAAFTERHOURS]

I also have USAA and my policy is a bit high (new homeowner). Im considering shopping my homeowners to other vendors.

[LAAFTERHOURS]

I also have USAA and my policy is a bit high (new homeowner). Im considering shopping my homeowners to other vendors.

[LAAFTERHOURS]

I also have USAA and my policy is a bit high (new homeowner). Im considering shopping my homeowners to other vendors.

[analyst]

After every California wildfire episode, we hear the sad stories of the people who cannot rebuild their houses because their insurance amount was less than their replacement cost.

A while back, the California Department of Insurance gave all the insurance companies hell for allowing these conditions to exist.

So now, all the insurance companies, not just USAA, are supposed to be trying to prevent “under-insurance”.

Another case of the self-reliant people with a workable plan being constrained by government rules put in place to protect people who can’t take care of themselves.

[analyst]

After every California wildfire episode, we hear the sad stories of the people who cannot rebuild their houses because their insurance amount was less than their replacement cost.

A while back, the California Department of Insurance gave all the insurance companies hell for allowing these conditions to exist.

So now, all the insurance companies, not just USAA, are supposed to be trying to prevent “under-insurance”.

Another case of the self-reliant people with a workable plan being constrained by government rules put in place to protect people who can’t take care of themselves.

[analyst]

After every California wildfire episode, we hear the sad stories of the people who cannot rebuild their houses because their insurance amount was less than their replacement cost.

A while back, the California Department of Insurance gave all the insurance companies hell for allowing these conditions to exist.

So now, all the insurance companies, not just USAA, are supposed to be trying to prevent “under-insurance”.

Another case of the self-reliant people with a workable plan being constrained by government rules put in place to protect people who can’t take care of themselves.

[analyst]

After every California wildfire episode, we hear the sad stories of the people who cannot rebuild their houses because their insurance amount was less than their replacement cost.

A while back, the California Department of Insurance gave all the insurance companies hell for allowing these conditions to exist.

So now, all the insurance companies, not just USAA, are supposed to be trying to prevent “under-insurance”.

Another case of the self-reliant people with a workable plan being constrained by government rules put in place to protect people who can’t take care of themselves.

[analyst]

After every California wildfire episode, we hear the sad stories of the people who cannot rebuild their houses because their insurance amount was less than their replacement cost.

A while back, the California Department of Insurance gave all the insurance companies hell for allowing these conditions to exist.

So now, all the insurance companies, not just USAA, are supposed to be trying to prevent “under-insurance”.

Another case of the self-reliant people with a workable plan being constrained by government rules put in place to protect people who can’t take care of themselves.

[Raybyrnes]

You could be a fool and go for an ACV (acutal cash value) policy. Sounds like your insurer is simply doing a good job. In the event something happened, you would appreciate the fact that you had professional service

[Raybyrnes]

You could be a fool and go for an ACV (acutal cash value) policy. Sounds like your insurer is simply doing a good job. In the event something happened, you would appreciate the fact that you had professional service

[Raybyrnes]

You could be a fool and go for an ACV (acutal cash value) policy. Sounds like your insurer is simply doing a good job. In the event something happened, you would appreciate the fact that you had professional service

[Raybyrnes]

You could be a fool and go for an ACV (acutal cash value) policy. Sounds like your insurer is simply doing a good job. In the event something happened, you would appreciate the fact that you had professional service

[Author]

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