I have two part question about Homeowner's insurance. I just renewed my
annual homeowner's insurance with a well known insurance carrier. Is it
possible to change my mind and cancel it since i just found out Friday
that i can get a better deal with another insurance company or will i
have to wait until it expires next year? Now here is the 2nd part of my
question. The reason i found a better deal that will save me about $300
is that my friend told me his insurance agent mentioned about insuring
the structure of the house is all that i need to do, not the house and
land. He said most insurance companies based the insurance on the land
and house when all i have to do is tell them that coverage is only
needed for structure of house. Anyone care to explain the details of
what exactly this meant? Thank you.

writes:

I have two part question about Homeowner's insurance. I just renewed my
annual homeowner's insurance with a well known insurance carrier. Is it
possible to change my mind and cancel it since i just found out Friday
that i can get a better deal with another insurance company or will i
have to wait until it expires next year? Now here is the 2nd part of my
question. The reason i found a better deal that will save me about $300
is that my friend told me his insurance agent mentioned about insuring
the structure of the house is all that i need to do, not the house and
land. He said most insurance companies based the insurance on the land
and house when all i have to do is tell them that coverage is only
needed for structure of house. Anyone care to explain the details of
what exactly this meant? Thank you.

The state probably only requires you to have liability insurance for
your car... but if you had a brand new $25000 car you paid cash for,
would you only buy liability insurance because it's the absolutely
cheapest insurance you could legally buy?

Your friend MAY be right with respect to what the mortgage holder
requires, but do you really want to be that sparsely insured? If
disaster struck, would new unknown fast talking buddy's company cut
you a check for enough to actually rebuild the house to liveable
condition to current codes? Or would you be stuck responsible for a
30 year mortgage on an unlivable piece of property that your insurance
company hasn't paid you quite enough to make livable? And say, you
ahve a total loss on the house due to say, fire and it burns to the
ground. If you only have the structure covered, How much do you think
you have in there in terms of furnishings? Clothing? Electronics?
Carpet? Draperies? Artwork? Lawnmower in the garage? Appliances?
I mean, we're potentially talking a hell of a reduction in coverage
for a mere $300/year.

3 things to do if you think this is worth $300:
a) review the insurance requirement wording in your mortgage.
This is in the closing paperwork (that ton of **** you
signed when you bought your house).
b) Call your existing insurance company to ask about this. I
bet they'd offer you the same lower level of insurance and
save you the same $300 or more perhaps if you reduce your
coverage like this.
c) Call your buddy and have his company put that quote in
writing so you can compare truly apples to apples. Research
his company's ratings too.
d) do a gut check and decide if this risk you're offloading
fro teh insurance company is something you have the
financial wherewithall to take if a tornado or fire
completely levels your house.

To your original question, no, there is generally no problem
cancelling insurance mid-year and transferring to another company.
You should get a prorated portion of your premium back for the unused
portion of the term for which you'd paid.

But to do all this crap for $300 ... I'm not sure that small a
difference would be worth my time to research the alternatives and it
smells like a sales trick to me.

Best Regards,
--
Todd H.
http://www.toddh.net/

In article .com,
says...

Now here is the 2nd part of my
question. The reason i found a better deal that will save me about $300
is that my friend told me his insurance agent mentioned about insuring
the structure of the house is all that i need to do, not the house and
land. He said most insurance companies based the insurance on the land
and house when all i have to do is tell them that coverage is only
needed for structure of house. Anyone care to explain the details of
what exactly this meant? Thank you.

Homeowners insurance doesn't cover your land anyway -- land doesn't burn
down.

Your insurance covers your home. There are different ways of covering
the house -- cash value pays you a depreciated value, replacement cost
pays to rebuild the house. You can save money every year by buying less
insurance for your house, but that doesn't mean it's a good idea.

It's far more common for people to have too little insurance, not too
much. Your 2000 square foot home burns down and you only have enough
coverage to build a 1400 square foot replacement, or maybe enough to put
a nice double-wide on the lot.

You can also save money by under-insuring the contents of your house,
insure your personal property at cash value instead of replacement cost,
as long as you don't mind replacing everything out of thrift stores and
garage sales.


Now, it *is* possible your house is over-insured, it does happen. But
before accepting a lower insurance value, I'd want to be sure it's based
on a current, detailed replacement cost calculation using current
construction costs for your market.

--
is Joshua Putnam
http://www.phred.org/~josh/
Updated Bicycle Touring Books List:
http://www.phred.org/~josh/bike/tourbooks.html

Joshua Putnam wrote:
In article .com,
says...

Now here is the 2nd part of my
question. The reason i found a better deal that will save me about $300
is that my friend told me his insurance agent mentioned about insuring
the structure of the house is all that i need to do, not the house and
land. He said most insurance companies based the insurance on the land
and house when all i have to do is tell them that coverage is only
needed for structure of house. Anyone care to explain the details of
what exactly this meant? Thank you.

Homeowners insurance doesn't cover your land anyway -- land doesn't burn
down.


Exactly. ALL insurance companies look at the value of the structure
seperate from the land for precisely that reason. The house is what
they need to pay for if it is lost due to fire or storm. So, your
friend is full of baloney. But the insurance does cover the land
too, in the sense that if someone slips and falls out in your yard, or
a tree gets knocked down by a storm and damages your fence, etc. they
are covered. But those things are relatively minor in consideration
compared to the replacement cost of the house.

If you're getting 2 very different quotes, I'd make sure I understand
the differences in the policies, ie are both replacement cost based,
same deductibles, limits, etc and the companies track records before
going with either. I think you will find that is where the real
differences

And yes, if you cancel a policy, the remaining premium should be
refundable.




Your insurance covers your home. There are different ways of covering
the house -- cash value pays you a depreciated value, replacement cost
pays to rebuild the house. You can save money every year by buying less
insurance for your house, but that doesn't mean it's a good idea.

It's far more common for people to have too little insurance, not too
much. Your 2000 square foot home burns down and you only have enough
coverage to build a 1400 square foot replacement, or maybe enough to put
a nice double-wide on the lot.

You can also save money by under-insuring the contents of your house,
insure your personal property at cash value instead of replacement cost,
as long as you don't mind replacing everything out of thrift stores and
garage sales.


Now, it *is* possible your house is over-insured, it does happen. But
before accepting a lower insurance value, I'd want to be sure it's based
on a current, detailed replacement cost calculation using current
construction costs for your market.

--
is Joshua Putnam
http://www.phred.org/~josh/
Updated Bicycle Touring Books List:
http://www.phred.org/~josh/bike/tourbooks.html

wrote:

my friend told me his insurance agent mentioned about insuring
the structure of the house is all that i need to do, not the house and
land. He said most insurance companies based the insurance on the land
and house when all i have to do is tell them that coverage is only
needed for structure of house. Anyone care to explain the details of
what exactly this meant?


I can't imagine any insurance company will insure land. What you may have done
is provided a value of your property that included the land value. You should
check and make sure your current insured value is structure and contents...

I thought when they meant "structure", it was the house itself. So if
my house burned down, it would be insured. Anyways, thanks guys for
the info, i'll look into my policy to see what was exactly covered.

Oh, the reason i was looking elsewhere was that last year i had paid
$950, this year i paid $1200. I had asked my agent why it went up and
he said the property value of my house went up this year. However, the
city appraisal for my house was like $185,300 this year as opposed to
$185,100 from last year.

wrote:
I thought when they meant "structure", it was the house itself. So if
my house burned down, it would be insured. Anyways, thanks guys for
the info, i'll look into my policy to see what was exactly covered.

writes:

Oh, the reason i was looking elsewhere was that last year i had paid
$950, this year i paid $1200. I had asked my agent why it went up and
he said the property value of my house went up this year. However, the
city appraisal for my house was like $185,300 this year as opposed to
$185,100 from last year.

Insurance company wouldn't have any visibility or care about the city
appraisal I don't think.

We're seeing insurance rate increases across the board due to a
certain unprecedented natural disaster down south last year that many
folks seem to have forgotten about. The insurance companies paid out
enormous $ in claims and are in recoup mode.

Best Regards,
--
Todd H.
http://www.toddh.net/

Todd H. wrote:
writes:

Oh, the reason i was looking elsewhere was that last year i had paid
$950, this year i paid $1200. I had asked my agent why it went up and
he said the property value of my house went up this year. However, the
city appraisal for my house was like $185,300 this year as opposed to
$185,100 from last year.


Unless you have a history of a lot of claims, live somewhere
particularly subject to major disasters or high crime, etc, $1200
sounds way out of line. For a $185K house, a homeowners policy should
be less than half that.






Insurance company wouldn't have any visibility or care about the city
appraisal I don't think.

We're seeing insurance rate increases across the board due to a
certain unprecedented natural disaster down south last year that many
folks seem to have forgotten about. The insurance companies paid out
enormous $ in claims and are in recoup mode.

Best Regards,
--
Todd H.
http://www.toddh.net/

In article .com,
wrote:

Unless you have a history of a lot of claims, live somewhere
particularly subject to major disasters or high crime, etc, $1200
sounds way out of line. For a $185K house, a homeowners policy should
be less than half that.


That does sound very high. Another factor could be the deductible. Maybe
he has a very small one.


Dimitri

On 14 Aug 2006 11:29:09 -0700, wrote:
Todd H. wrote:
writes:

Oh, the reason i was looking elsewhere was that last year i had paid
$950, this year i paid $1200. I had asked my agent why it went up and
he said the property value of my house went up this year. However, the
city appraisal for my house was like $185,300 this year as opposed to
$185,100 from last year.

Unless you have a history of a lot of claims, live somewhere
particularly subject to major disasters or high crime, etc, $1200
sounds way out of line. For a $185K house, a homeowners policy should
be less than half that.

The premium will also be affected by the age of the house, and
therefore the quality of the materials required to rebuild the house
to its "original" standards. A newer house is constructed of cheaper
materials than older 1930s houses like mine, with lots of wood trim
and plaster and lath walls. My homeowner's policy premium is $935 a
year for $319,350 replacement coverage and $1,000 deductible. The
house itself is not worth $320k in my market ($200k would be a great
price), but that's what it would cost to rebuild.

KLS writes:
The premium will also be affected by the age of the house, and
therefore the quality of the materials required to rebuild the house
to its "original" standards.

Indeed. I've encountered insurance companies which will quote
policies for insuring your home to rebuild with either current
or original materials (for older homes, current will be much
cheaper), and I've encountered insurance companies which will
only quote for original materials. I don't know if there are
any companies that will only quote for current materials.

This is particularly annoying to me because I've got a 120
year old house, and I'd really like to use a particular
insurance company, but that company will only issue a policy
for original materials, and I don't care to insure for
original materials, which is a significantly more expensive
policy. If my house burns down, I'm perfectly happy
rebuilding with modern materials. So I'm stuck using another
insurance company that I don't like.

--
Help stop the genocide in Darfur!
http://www.genocideintervention.net/

I'd ratherhave ahouse built with new windows and meeting current codes
with enoughoutletsetc

KLS wrote:
On 14 Aug 2006 11:29:09 -0700, wrote:
Todd H. wrote:
writes:

Oh, the reason i was looking elsewhere was that last year i had paid
$950, this year i paid $1200. I had asked my agent why it went up and
he said the property value of my house went up this year. However, the
city appraisal for my house was like $185,300 this year as opposed to
$185,100 from last year.

Unless you have a history of a lot of claims, live somewhere
particularly subject to major disasters or high crime, etc, $1200
sounds way out of line. For a $185K house, a homeowners policy should
be less than half that.

The premium will also be affected by the age of the house, and
therefore the quality of the materials required to rebuild the house
to its "original" standards. A newer house is constructed of cheaper
materials than older 1930s houses like mine, with lots of wood trim
and plaster and lath walls. My homeowner's policy premium is $935 a
year for $319,350 replacement coverage and $1,000 deductible. The
house itself is not worth $320k in my market ($200k would be a great
price), but that's what it would cost to rebuild.

writes:
I'd ratherhave ahouse built with new windows and meeting current codes
with enoughoutletsetc

When it's time to rebuild the house, you can choose whatever materials
you want... The cost of an original-materials policy is based on what
it would cost to rebuild the house with original materials, but you
aren't *required* to do so.

Also, when a house is rebuilt nowadays with "original materials," what
that generally means is that you get the best of both worlds....
old-style materials are used when they are better, and new materials
are used when they are better.

Finally, of course if your house is rebuilt it will have to meet
current codes, and how many outlets you install has nothing to do with
whether original or modern materials are used to rebuild the house.

--
Help stop the genocide in Darfur!
http://www.genocideintervention.net/

The house was new when i bought it 2 yrs ago. No claims on it. Rita
came through to the east side of my city last year. However, my agent
never mentioned about the Hurricane causing the increase. He just said
the property value went up.

writes:

The house was new when i bought it 2 yrs ago. No claims on it. Rita
came through to the east side of my city last year. However, my agent
never mentioned about the Hurricane causing the increase. He just said
the property value went up.

Heh... typical realtor.

--
Todd H.
http://www.toddh.net/

I am a licensed insurance broker in NY and you cannot insure your land. There are endorsements that
will cover certain trees or landscaping up to a certain distance from the dwelling.



On 13 Aug 2006 22:31:07 -0700, wrote:

I have two part question about Homeowner's insurance. I just renewed my
annual homeowner's insurance with a well known insurance carrier. Is it
possible to change my mind and cancel it since i just found out Friday
that i can get a better deal with another insurance company or will i
have to wait until it expires next year? Now here is the 2nd part of my
question. The reason i found a better deal that will save me about $300
is that my friend told me his insurance agent mentioned about insuring
the structure of the house is all that i need to do, not the house and
land. He said most insurance companies based the insurance on the land
and house when all i have to do is tell them that coverage is only
needed for structure of house. Anyone care to explain the details of
what exactly this meant? Thank you.

On 14 Aug 2006 06:22:59 -0700, wrote:


Joshua Putnam wrote:
In article .com,
says...

Now here is the 2nd part of my
question. The reason i found a better deal that will save me about $300
is that my friend told me his insurance agent mentioned about insuring
the structure of the house is all that i need to do, not the house and
land. He said most insurance companies based the insurance on the land
and house when all i have to do is tell them that coverage is only
needed for structure of house. Anyone care to explain the details of
what exactly this meant? Thank you.

Homeowners insurance doesn't cover your land anyway -- land doesn't burn
down.


Exactly. ALL insurance companies look at the value of the structure
seperate from the land for precisely that reason. The house is what
they need to pay for if it is lost due to fire or storm. So, your
friend is full of baloney. But the insurance does cover the land
too, in the sense that if someone slips and falls out in your yard, or
a tree gets knocked down by a storm and damages your fence, etc. they
are covered. But those things are relatively minor in consideration
compared to the replacement cost of the house.

If you're getting 2 very different quotes, I'd make sure I understand
the differences in the policies, ie are both replacement cost based,
same deductibles, limits, etc and the companies track records before
going with either. I think you will find that is where the real
differences



I've got a lot of experience with insurance and I agree 100% with that
last paragraph.

// doug //
website: MyHomeRebate.com
"Buy New Homes for Less in Texas"

In article .com,
says...
The house was new when i bought it 2 yrs ago. No claims on it. Rita
came through to the east side of my city last year. However, my agent
never mentioned about the Hurricane causing the increase. He just said
the property value went up.

Perhaps he simply did an inadequate job of explaining the increase in
construction costs after the hurricane. If your house is insured at
replacement cost, and if the cost of construction sees a sustained
increase because of all the rebuilding going on, then your replacement
cost should also go up to cover the increase in what it would cost to
rebuild your home.

--
is Joshua Putnam
http://www.phred.org/~josh/
Braze your own bicycle frames. See
http://www.phred.org/~josh/build/build.html

On 13 Aug 2006 22:31:07 -0700, someone wrote:

... Is it
possible to change my mind and cancel it since i just found out Friday
that i can get a better deal with another insurance company....
snip.... The reason i found a better deal that will save me about $300
is that my friend told me his insurance agent mentioned about insuring
the structure of the house is all that i need to do, not the house and
land....


So why would you have to change companies to get this advantage? Just
have your existing company reduce the amount you are covered for.


Reply to NG only - this e.mail address goes to a kill file.

In article ,
says...

So why would you have to change companies to get this advantage? Just
have your existing company reduce the amount you are covered for.

Depends on the company, some homeowners insurance companies refuse to
insure a house for less than the replacement cost they calculate. It
may cost a few policies, but it cuts down on complaints and E&O suits
after major losses.

--
is Joshua Putnam
http://www.phred.org/~josh/
Updated Bicycle Touring Books List:
http://www.phred.org/~josh/bike/tourbooks.html