On Tue, 7 Sep 2004 21:28:43 -0700, "Jeremy"
scribbled this interesting note:

This happened to us recently. We decided to shop around and found odd
pricing. also. Keep in mind this home is new.

What we found. The bigger insurance companies quoted the price to rebuild
our house if it burnt to the ground in 2004. We paid 205,000 for our house
and the bigger insurance companies quoted like $320,000. I guess this was
the price to have a custom home builder come in and rebuild our home from
the ground up.

The smaller simply quoted us the current value. $216,000. If you call the
company and speak to the agent they will likely quote you a higher price.

Insurance companies like to quote based on so called "replacement"
value. What usually fails to be taken into account in that equation is
the fact that even if a F-4 tornado swooped in and cleaned the lot
your house is on and removed even the foundation, you still have the
land. It was not destroyed. A real replacement value policy would take
this into account and not insure you to replace the ground your house
is built on. So if you have a quarter million dollar home I'd guess
the lot is worth somewhere around $50,000 to $80,000. That really
ought to be removed from the policy as the land cannot be destroyed in
any conventional way. Your home insurance policy ought to be for
somewhere in the neighborhood of $185,000 as that is what it may cost
to merely replace the house.

--
John Willis
(Remove the Primes before e-mailing me)