On Tue, 11 Nov 2003 12:49:05 GMT, wrote:

On Tue, 11 Nov 2003 06:24:35 GMT, "Chia Pet" Chia wrote:

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.

Actually, you can't.


So how to assure convergence between reality and insurance adjustors?


Everything you said above is incorrect. You can insure the house for replacement
cost. That means if it burns down, they build you a similar house on the same
piece of dirt. Not replacement "value" to buy a different house on a different
piece of dirt - THE COST TO REPLACE BY REBUILDING. Home insurance is not the
same as car insurance. You need to do a little homework. My insurance not only
covers the actual replacement cost, but additionally provides the same amount
for "loss of use" protection. That pays my rent and other expenses during the
time my house is unavailable to live in.

BB

The confusion seems to be replacement VALUE (market value) and
replacement COST (cost to rebuild). Some companies will not just write
a check for the replacement cost. They require that you actually
rebuild.