"Mary Shafer" wrote in message
...
On Thu, 13 Nov 2003 00:25:40 GMT, "George E. Cawthon"
wrote:


I haven't a clue what you are talking about. Replacement is
replacement, There is no way you can buy/sell a home for
$125k and need $350k to replace it. Maybe what you are
trying to replace is an old piece of crap with a modern full
frills house. For instance if you house is a 3 bedroom 1
bath, you sure won't get the money to replace it with a 5
bedroom 3 bath house. Only in a very few highly specialized
cases would the difference in cost and replacement be a
factor of 3, and in those case your house would probably be
condemended as unlivable.

I've had cases where people have purchased homes around our city for
$50-$60,000(mostly because of the neighborhood) and it'd cost upwards of
$200,000 to replace them. Homes from the turn of the century would cost more
to rebuild than a standard home today. Homes then used 2x6's instead of
2x4's, some homes have oak flooring & moldings, on top of having to update
the home to current code standards. Replacement Cost means Replacement Cost.
I've had clients complain about the price of insurance, but when they have a
claim they expect to get their premiums back(figuratively speaking) and then
some. So yes, you can conceivably purchase a home for $125,000 and have the
Replacement Cost equal $350,000.

As far as 'frills', if the home burns down and you had an old 'octopus'
furnace - would you expect the insurance company to find another old furnace
to replace it? Of course not. Granted you will see some 'upgrades' - new
furnace, water heater, etc. but I don't consider these 'frills'.

My 2c,

Matty