"Stormin Mormonn" wrote in message
...
Close your eyes (after reading this, silly) tap your heels together three
times, and say "I want to be back in Kansas, Toto".

And then call the city appraiser, and the insurance agent, in about that
order.

--

Christopher a. Young
Learn more about Jesus
www.lds.org
www.mormons.org


"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???





Where I work and live(I'm an insurance agent in the midwest), when we write
insurance on homes, a Replacement Cost Estimate is done. I ask about all the
features of the home and based on that with the age and where its located, I
am able to come up with an approximate cost of construction to rebuild the
house today. That's how much insurance I recommend clients place on their
home.

Many times the RCE is less than the mortgage amount, so clients are forced
to insure for the mortgage amount(which is kind of stupid, IMHO).

Ask your agent to do an RCE or have the insurance company send out an
appraiser.

Do remember that RCE does not equal Market Value(what you could sell the
home for). Market Value includes land, RCE does not... For example, my
home's Market Value is around $120,000(we recently refinanced so I know) but
the RCE is around $130,000. Some homes on the lake are going for $750,000 -
but the RCE may only be $350,000.

Hope this helps!

Matty