YAHIT

[spacejamz]

The typical property tax bill is based on the total value of the land and improvements (i.e. house). For example, say the land is worth $50k and the house itself is worth $100k.

Should your homeowner policy cover only what the house is valued at (plus any riders for jewelery, etc) or what the property is valued at?

Seems like if the house gets destroyed, you would only need the money to rebuild the house itself. Would there be any benefit in getting a $150k policy if the house itself only cost $100k to build?

 

[Zeeky Boogy Doog]

you might need that extra 50k if theres a volcano below you and it erupts!

 

[slag]

In answer to your question (kind of), if you own a $30,000 house and get an insurance policy for $100,000 and your house burns to the ground, the insurance company will pay you $100.00. They pay out the value of your policy, not the actual value of the house.

 

[spacejamz]

Originally posted by: slag
In answer to your question (kind of), if you own a $30,000 house and get an insurance policy for $100,000 and your house burns to the ground, the insurance company will pay you $100.00. They pay out the value of your policy, not the actual value of the house.

So what is the benefit in getting the value of the policy to vastly exceed the value of the house itself?

Considering you only get the check if the house gets destoyed and you would be paying a higher premium every year, would you just hope your house gets destroyed so you collect a bigger check?

I would think one would normally get enough to cover the cost to rebuild the house itself (probably with a slight cushion) so they would minimize their yearly homeowner insurance premiums.

 

[waggy]

Originally posted by: slag
In answer to your question (kind of), if you own a $30,000 house and get an insurance policy for $100,000 and your house burns to the ground, the insurance company will pay you $100.00. They pay out the value of your policy, not the actual value of the house.

wow thats some crappy insurance if they will only pay you $100.00!

 

[DrPizza]

Originally posted by: slag
In answer to your question (kind of), if you own a $30,000 house and get an insurance policy for $100,000 and your house burns to the ground, the insurance company will pay you $100.00. They pay out the value of your policy, not the actual value of the house.

Huh?!?

uhhhh, yeah. First of all, you're not required to have insurance on your house by law. However, if a bank holds your mortgage, they will require you to have sufficient insurance in case of such an occurance. That way, when your house burns to the ground, they're not screwed. Imagine 1 week after purchasing the house, it burns to the ground. Do you actually think that banks are going to be satisfied receiving a check for $100? I do recall something like you're claiming, but I believe you have the situation wrong.

Second of all, most homeowners policies cover more than just the value of the physical structure of the house. The market value of my house is around 50K. My insurance is for around 125K or 150K. I carry full replacement value, with a higher deductible. Thus, if I go on vacation and my house is struck by lightening, ruining all of my electronic equipment, my insurance pays the full replacement value of that equipment. (example: My 54 inch television cost $1500 new. If it get's ruined, I get $1500 for a new one, not $50 because that's the street value of a used television). Of course, minus the deductible. But, there's only one deductable per occurance - so if I lost 2 computers, television, dvd player - I get the sum of their values new, minus the deductable.

Have you ever thought about how much it would cost to replace every one of your possessions? Unless you're going to go shopping at the Salvation Army, you'll probably be paying retail to replace your clothing after a fire. And, if you have a lot of clothes, it really adds up! Heck - footware alone: 2 pairs of sneakers, 2 pairs of dress shoes (1 pair brown, 1 pair black, like any man should own), hunting boots, fishing shoes, hiking boots - there's a quick 4 or 5 hundred dollars. I shudder to think what the retail value of my wife's footware adds up to.

So, when you buy that insurance policy for 100K on the 30K house, you're insuring much more than just the physical structure, but also the contents of the home.

 

[slag]

Originally posted by: DrPizza

Originally posted by: slag
In answer to your question (kind of), if you own a $30,000 house and get an insurance policy for $100,000 and your house burns to the ground, the insurance company will pay you $100.00. They pay out the value of your policy, not the actual value of the house.

Huh?!?

uhhhh, yeah. First of all, you're not required to have insurance on your house by law. However, if a bank holds your mortgage, they will require you to have sufficient insurance in case of such an occurance. That way, when your house burns to the ground, they're not screwed. Imagine 1 week after purchasing the house, it burns to the ground. Do you actually think that banks are going to be satisfied receiving a check for $100? I do recall something like you're claiming, but I believe you have the situation wrong.

Second of all, most homeowners policies cover more than just the value of the physical structure of the house. The market value of my house is around 50K. My insurance is for around 125K or 150K. I carry full replacement value, with a higher deductible. Thus, if I go on vacation and my house is struck by lightening, ruining all of my electronic equipment, my insurance pays the full replacement value of that equipment. (example: My 54 inch television cost $1500 new. If it get's ruined, I get $1500 for a new one, not $50 because that's the street value of a used television). Of course, minus the deductible. But, there's only one deductable per occurance - so if I lost 2 computers, television, dvd player - I get the sum of their values new, minus the deductable.

Have you ever thought about how much it would cost to replace every one of your possessions? Unless you're going to go shopping at the Salvation Army, you'll probably be paying retail to replace your clothing after a fire. And, if you have a lot of clothes, it really adds up! Heck - footware alone: 2 pairs of sneakers, 2 pairs of dress shoes (1 pair brown, 1 pair black, like any man should own), hunting boots, fishing shoes, hiking boots - there's a quick 4 or 5 hundred dollars. I shudder to think what the retail value of my wife's footware adds up to.

So, when you buy that insurance policy for 100K on the 30K house, you're insuring much more than just the physical structure, but also the contents of the home.

What do you mean huh.. we are in agreement.

 

[Lola]

Ok, you should not isnure your house for the property value, because it includes just that.. the property/land.

There is no point to insure land. Worst case senario: if your home burns down, you dont replace the land. all ins co's will have an inspector look at the home and determine a value for the DWELLING. thats what your insurance is for... the dwelling and contents inside.

so... if you bought a house for 200,000 and the land is 50,000 of that, more likely than not, you only need to insure 150,000.

 

[DrPizza]

Originally posted by: Lola
Ok, you should not isnure your house for the property value, because it includes just that.. the property/land.

There is no point to insure land. Worst case senario: if your home burns down, you dont replace the land. all ins co's will have an inspector look at the home and determine a value for the DWELLING. thats what your insurance is for... the dwelling and contents inside.

so... if you bought a house for 200,000 and the land is 50,000 of that, more likely than not, you only need to insure 150,000.

Slag, we're not in agreement with one part: Your insurance company doesn't pay you $100. It pays for the value of what you've lost, up to the limit of your policy (minus the deductable)

Lola, you mentioned "dwelling and contents inside"
If the house is worth 150K, I'd think you would want an insurance policy for quite a bit in excess of 150K. (unless you spent everything on the house.) Personally, the contents of my home are worth at least twice what my home is worth (rough estimate)

 

[slag]

Originally posted by: DrPizza

Originally posted by: Lola
Ok, you should not isnure your house for the property value, because it includes just that.. the property/land.

There is no point to insure land. Worst case senario: if your home burns down, you dont replace the land. all ins co's will have an inspector look at the home and determine a value for the DWELLING. thats what your insurance is for... the dwelling and contents inside.

so... if you bought a house for 200,000 and the land is 50,000 of that, more likely than not, you only need to insure 150,000.

Slag, we're not in agreement with one part: Your insurance company doesn't pay you $100. It pays for the value of what you've lost, up to the limit of your policy (minus the deductable)

Lola, you mentioned "dwelling and contents inside"
If the house is worth 150K, I'd think you would want an insurance policy for quite a bit in excess of 150K. (unless you spent everything on the house.) Personally, the contents of my home are worth at least twice what my home is worth (rough estimate)

That $100.00 was a typo.

Your insurance will pay out the full value of your policy regardless, at least in Kansas, if its considered a total loss. My wife is an insurance adjuster.

 

[Lola]

Originally posted by: DrPizza

Originally posted by: Lola
Ok, you should not isnure your house for the property value, because it includes just that.. the property/land.

There is no point to insure land. Worst case senario: if your home burns down, you dont replace the land. all ins co's will have an inspector look at the home and determine a value for the DWELLING. thats what your insurance is for... the dwelling and contents inside.

so... if you bought a house for 200,000 and the land is 50,000 of that, more likely than not, you only need to insure 150,000.

Slag, we're not in agreement with one part: Your insurance company doesn't pay you $100. It pays for the value of what you've lost, up to the limit of your policy (minus the deductable)

Lola, you mentioned "dwelling and contents inside"
If the house is worth 150K, I'd think you would want an insurance policy for quite a bit in excess of 150K. (unless you spent everything on the house.) Personally, the contents of my home are worth at least twice what my home is worth (rough estimate)

i am sorry, i should have clairified.... the dwelling should be covered for that... the contents are a seperate part of the policy. that 150, 000 should only be for the dwelling coverage.

There are different parts to each HO policy. usually, with a normal policy, teh contents are about 70% of what the dwelling is insured for, but a lot of times, customers will want to raise their contents limits.

The one thing i can say and that i tell my customers is that take a camcorder or camera and take pics of your main stuff besdies keeping reciepts. Keep them at your office or bank or something. in the event that something happens, you will have a clear photo or video of what you had. You'd be surpirsed how one can forget things durring or after an accident/claim

 

[spacejamz]

There are different parts to each HO policy. usually, with a normal policy, teh contents are about 70% of what the dwelling is insured for, but a lot of times, customers will want to raise their contents limits

This is exactly what I was talking about...

my policy has 4 sections

A - Dwelling
B - Other Structures
C- Personal Property
D- Loss of Use

My question was referring to the value used in section A...should it be just the value of the house itself or should it be a total of the land and house? My policy right now reflects the house and land but I was wondering if it should reflect the house?