Chia Pet wrote:

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???

Sure, just get a replacement policy. It's the insurance
company's problem of figuring out what the value is and
setting the price of insurance. If the house burns down,
they still have to replace it even if they valued the
replacement cost too low.

But, you bought a house and a year later it is worth twice
what you paid for it and you are whining? I'd be dancing
if I could do that. It took at least 10 years for my house
to double in value.