"Daniel L. Belton" wrote in message
...

On 10-Nov-2003, "wayne" wrote:

talk to your agent it should not be a problem insuring it for the
correct
cost also many policies cover replacement cost up to 125% of value to
cover
for inflation if you have to get an appraisal done then do it!


if not change companies.

Wayne


"Chia Pet" Chia wrote in message
...
I've been watching real estate around me with absolute astonishment.
After
being evicted from our apartment last December because the landlord
sold
the
house, we bought a home for $51k and insured it for $75. We did alot
of
work
on it to make it nice. But regardless of that, real estate prices have
gone
crazy and we couldn't replace our home with less than $100-125k now,
less
than a year later.

The other night I had a nightmare that my house burnt down and, even
after
hopefully convincing the insurance company we deserve $75k, we had
$75k
and
were hopelessly unable to buy a home.

The good news is I woke up and the house is fine and near a fire
hydrant
and
fire house. The bad news is that really is my insurance situation. The
purchase price is the insurance company's weapon against a higher
claim
(the
purchase price was abnormally low even then). But replacement even
with
a
$25k increase would definitely be impossible now.

Is there a way out of this nightmare?

I agree 100%. Most companies will insure for replacement value, plus a
certain percentage to cover contents. If you need more content insurance,
then you have to get extra riders on your policy to cover it. If your
insurance doesn't cover replacement value, then you need to talk to your
insurance agent to change it. If they won't change it, then it's time to
look for a new insurance company...

Ok, the thing that worries me is this. I insure for replacement value. The
insurance company says " replacement value is the cost to buy a similar
property - market value - the price you paid, perhaps with an inflation
adjustment. Certainly not the price of those other more expensive properties
which, based on what you paid, your property surely isn't."

You can buy $1 million insurance on a $100k property. If it burns, you just
get $100k.

So how to assure convergence between reality and insurance adjustors?