Reputable insurers offering HO8 Modified (AKA Market Value) homeowner's policies?
March 5, 2012 6:24 AM Subscribe
Replacement cost for my house is estimated to be 3-4x market value. I'm therefore looking at obtaining a "market value" homeowners' policy. USAA reps I've spoken to indicate they don't offer market value policies and this doesn't seem to be something the online quote systems are prepared to handle. As such, it looks like I'll need to be contacting live humans on the phone. Anyone have leads on good companies to work with? Location is northwest Alabama.
Get in touch with an insurance agent who can quote different carriers (not a captive agent). Sounds like you have a unique case with such a high replacement value. An agent can help you on this.
posted by FergieBelle at 7:25 AM on March 5, 2012
posted by FergieBelle at 7:25 AM on March 5, 2012
Also look at insuring various systems within the house; the roof, the HVAC, the electrical. These are riders that may or may not be added to an individual company's homeowner's policy, and may get you closer to replacement value. Sometimes it's the sheer square footage that increases cost of replacement; other times it is fit, finish and quality of materials. Or historic value. Nail down the big expense and work from there.
Flood insurance (even if you are not in a flood zone, although your location suggests you may be) did cover water damage from a tornado for a friend in the recent Trussville outbreak.
Talking with a company such as State Farm, who are more familiar with the territory there might also be helpful to you.
Just as there are "jumbo" mortgages, there are "jumbo" insurers as well. Research Lloyd's of London and others at that level.
posted by halfbuckaroo at 7:49 AM on March 5, 2012
Flood insurance (even if you are not in a flood zone, although your location suggests you may be) did cover water damage from a tornado for a friend in the recent Trussville outbreak.
Talking with a company such as State Farm, who are more familiar with the territory there might also be helpful to you.
Just as there are "jumbo" mortgages, there are "jumbo" insurers as well. Research Lloyd's of London and others at that level.
posted by halfbuckaroo at 7:49 AM on March 5, 2012
Best answer: I asked this question a few years back and it might help you.
posted by Lucinda at 7:50 AM on March 5, 2012
posted by Lucinda at 7:50 AM on March 5, 2012
You might have better luck talking about "agreed value". Rather than telling your agent/company what kind of policy you want, tell them what you're looking for and let them figure out which if any of their products get you what you want. I can read your question one of two ways.
Generally speaking, insurance companies are quite unwilling to sell you more insurance than something is worth, but tend to have fewer qualms about selling you less. Those qualms have to do with the unpleasantness of getting sued when the insured winds up not having enough coverage for their loss, as so often happens when they're just looking to save a buck or two. But there are certain cases where this is appropriate, and the company may even insist upon it in others.
For example, some older churches have ridiculous amounts of stained glass that would cost a mint to insure and replace. But if the congregation is shrinking or otherwise in financial difficulties, they may decide that they're willing to just replace it with regular glass rather than stained. This is a lot cheaper, so as long as the congregation is clear that this is what they're doing, insurance companies are willing to provide coverage on that basis. Similarly, there are some buildings which are otherwise good risks but whose roofs are just in terrible shape. The company may say "Look, we'll take your business, but we're only going to give you market value, not replacement cost, for that roof, because it's fixing to blow off the next time the wind kicks up. You fix the roof, then we'll talk." Same idea.
So if what you're looking to do is insure your home for its market price, which is lower than its replacement cost, you can probably find someone to do that for you. But it's entirely possible that your agent thought that the market price is higher than the replacement cost--which is usually how these things go--and insurance companies generally won't do that.
This is, however, something that's going to need some significant underwriting attention. Which means talking to an agent, on the phone or in person. Any of the big carriers is likely to be able to do this for you--and I'd be genuinely surprised if USAA wouldn't, once you've explained what you're actually looking to do--you just need to get someone on the phone.
posted by valkyryn at 7:56 AM on March 5, 2012
Generally speaking, insurance companies are quite unwilling to sell you more insurance than something is worth, but tend to have fewer qualms about selling you less. Those qualms have to do with the unpleasantness of getting sued when the insured winds up not having enough coverage for their loss, as so often happens when they're just looking to save a buck or two. But there are certain cases where this is appropriate, and the company may even insist upon it in others.
For example, some older churches have ridiculous amounts of stained glass that would cost a mint to insure and replace. But if the congregation is shrinking or otherwise in financial difficulties, they may decide that they're willing to just replace it with regular glass rather than stained. This is a lot cheaper, so as long as the congregation is clear that this is what they're doing, insurance companies are willing to provide coverage on that basis. Similarly, there are some buildings which are otherwise good risks but whose roofs are just in terrible shape. The company may say "Look, we'll take your business, but we're only going to give you market value, not replacement cost, for that roof, because it's fixing to blow off the next time the wind kicks up. You fix the roof, then we'll talk." Same idea.
So if what you're looking to do is insure your home for its market price, which is lower than its replacement cost, you can probably find someone to do that for you. But it's entirely possible that your agent thought that the market price is higher than the replacement cost--which is usually how these things go--and insurance companies generally won't do that.
This is, however, something that's going to need some significant underwriting attention. Which means talking to an agent, on the phone or in person. Any of the big carriers is likely to be able to do this for you--and I'd be genuinely surprised if USAA wouldn't, once you've explained what you're actually looking to do--you just need to get someone on the phone.
posted by valkyryn at 7:56 AM on March 5, 2012
is the disparity in market value vs replacement cost due to the age of your home? We have this problem because our home is large but 80 years old and in an older neighbourhood. If this is the case, keep in mind many insurers will not do a replacement cost policy on a home with older wiring or other issues related to older homes.
At this time, some insurance companies are not writing new property policies because there are such losses involved in that branch of insurance. I don't know how this affects rewriting existing policies. back in the day when i worked in insurance, a "replacement cost" policy was what you would ask for. Normally this was 20-30% percent higher than the value of the home calculated based on square footage, age etc. i have never seen a policy for 3 to 4 times the basis of a home and suspect you will have to search out a speciality insurer for this. As someone mentioned above, you can get a regular policy with replacement cost on specific items only, such as contents and roof. I would recommend this to anyone, the formula they usually use to calculate your contents value is based on the home value and is rarely adequate. As for flood insurance, you can only buy that in an actual flood plain. It is not offered everywhere.
posted by domino at 8:19 AM on March 5, 2012
At this time, some insurance companies are not writing new property policies because there are such losses involved in that branch of insurance. I don't know how this affects rewriting existing policies. back in the day when i worked in insurance, a "replacement cost" policy was what you would ask for. Normally this was 20-30% percent higher than the value of the home calculated based on square footage, age etc. i have never seen a policy for 3 to 4 times the basis of a home and suspect you will have to search out a speciality insurer for this. As someone mentioned above, you can get a regular policy with replacement cost on specific items only, such as contents and roof. I would recommend this to anyone, the formula they usually use to calculate your contents value is based on the home value and is rarely adequate. As for flood insurance, you can only buy that in an actual flood plain. It is not offered everywhere.
posted by domino at 8:19 AM on March 5, 2012
ok. disregard my post. while informative for someone asking the complete opposite of what you are asking, it is irrelevant to you. so much for multitasking.
i still would get replacement cost on my roof though.
posted by domino at 8:22 AM on March 5, 2012
i still would get replacement cost on my roof though.
posted by domino at 8:22 AM on March 5, 2012
Your state has an insurance commission, probably part of the attorney general's office. They'll know if providers are required to offer such coverage, etc.
posted by theora55 at 11:36 AM on March 5, 2012
posted by theora55 at 11:36 AM on March 5, 2012
Response by poster: I asked this question a few years back and it might help you.
Thanks, that hadn't turned up in my search.
posted by ferdinand.bardamu at 3:48 PM on March 5, 2012
Thanks, that hadn't turned up in my search.
posted by ferdinand.bardamu at 3:48 PM on March 5, 2012
Response by poster: i still would get replacement cost on my roof though.
Thanks but I do my own work and am thus not too price sensitive. (The previous owners cheaped out and hired incompetent roofers, didn't want to sink any more to fix the problems, and put it on the market. I lowballed them, they accepted first offer, and I swooped in and replaced the faulty section for $1000.)
posted by ferdinand.bardamu at 3:53 PM on March 5, 2012
Thanks but I do my own work and am thus not too price sensitive. (The previous owners cheaped out and hired incompetent roofers, didn't want to sink any more to fix the problems, and put it on the market. I lowballed them, they accepted first offer, and I swooped in and replaced the faulty section for $1000.)
posted by ferdinand.bardamu at 3:53 PM on March 5, 2012
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posted by beagle at 7:18 AM on March 5, 2012