Log home insurance in 2012?

[moe]

I just received a notice that Umialik is no longer insuring in Washington state. Any recommendations? Also how do you determine the building value for the insurance? I priced the kit I had purchased 20 years ago and its cost has tripled. I have 750 sq ft per floor X2, full unfinshed (just open space) daylight basement, 2 bedrooms and 1 and 1/2 bath. Thanks for your responses.

[Basil]

When looking for the value of a structure, most PVA offices that I've ever been to will have the value of the structure and the land separate on the tax roster. Go to them and ask the fair cash value of the improvements and they will give you the appraised value. As a side note, you may want to ask when it was valued last. Some places only update values when a property changes hands. As a second side note, it's possible that after they look at this info with you, they will decide to come look at your property and give it a new tax value!

[rkissinger]

In my experience with buying insurance the insurance company determines the value of the covered property. I've never been asked what value I would like to insure, instead they ask a bunch of questions about the property and then tell me "the quote will cost this much... and will cover this much..." Usually the value is based on the replacement cost. I have an old building in which the replacement cost is close to double of the actual value, but the insurance company won't let me insure it for less, hopefully it will burn down someday so these premiums I've been paying will be worth it! (That building is in Walla Walla, WA, by the way) I am insured with Liberty Mutual in WA, I've been happy with them for about 7 years. My rate did go up a bunch a year or two ago, when I called to complain they told me that there were some changes in WA and that everybody in the state had rate increases, I don't know if this is a fact or why, that's just what I was told. Best of Luck.

[FishingAddict]

Every carrier has their own means to establish a replacement cost - and frankly most are still using inflation ajustment factors that they used in the hot era of 2006-08. The higher the value as we all know - the higher the premium. And it's all about cash flow.
Now the kicker on RC is this - lets say its 2500 sf and today they can replace it for that. Guess what - insurance is based on a no loss and no gain. In other words they inflated you to $450K for RCV on insurance but when the time comes they get bids to duplicate at $340K --- what ya think they legally have to pay. lol
The positive thing is to get an adjuster such as an old time fisherman handling it and by gawd I see some remains of a custom cabinet (I know - they charred and how's one to really know. ;) )) so they all were, custom this and custom that. I cut a check for the full coverage under policy....and contents. Now an office mate of this particular fishing guy may very well see it totally different too. I say treat everyone as I expect to be treated - I pay for X I expect X if a total. That's just me.
Pretty simple concept. Fair is fair and honest to all.
Now it's blatant fraud and I see a gas can inside the house missing the top .... my mood can swing...fast.

If the current numbers are to crazy for your tastes I salways say check around.....some of the best rates and claim coverage today are Horace Mann, AutoOwners, Amica, newb's with Liberty Mutual (they play here-great claim co tho), and a dozen others ....

As far as singling you out rate wise - rate increases and policy changes have to be filed and approved by state(s) so it's not you. And yep - rates up and up and up as nationally claims remain high, per se. And yep --- they making lots of $$$ too

[edkemper]

Addict,

You misunderstood. According to your figures above, let me explain how they "insure" us.

Your total insured property is valued at $450,000. That is also insuring the land. When the house burns down, it only cost $340,000 to rebuild the house. The land didn't burn.

The insurance companies get special treatment by the government because of the amount of money they put in politician's pockets.

[fishlkmich]

I lost a house to a fire. Total loss. The insurance company told me what the house was insured for and required me to get three bids to rebuild. I got four. They have to get one, as well. We added the bids and divided by five. The amount to rebuild was 50K higher than I was insured for. They explained that it was my responsibility to know the cost of rebuilding and to be insured for that amount. I got the maximum amount that my policy covered. Contents coverage is usually about half of the structure coverage. When I rebuilt, I was sure to get a policy that covered what it would cost to replace my home and tacked on a 20% additional coverage that can be purchased for a slightly higher premium.

[FishingAddict]

I lost a house to a fire. Total loss. The insurance company told me what the house was insured for and required me to get three bids to rebuild. I got four. They have to get one, as well. We added the bids and divided by five. The amount to rebuild was 50K higher than I was insured for. They explained that it was my responsibility to know the cost of rebuilding and to be insured for that amount. I got the maximum amount that my policy covered. Contents coverage is usually about half of the structure coverage. When I rebuilt, I was sure to get a policy that covered what it would cost to replace my home and tacked on a 20% additional coverage that can be purchased for a slightly higher premium.

You must have had an ACV policy from what you said unless you were not insured for at least 80% of actual replacement cost...if you have RC on policy and it costs more to rebuild to same specs they pay it...per contract. Unless the policy was what is called an ACV policy (older policy form) or you had not insured it to at least that 80% figure. I know a fishing junky who is settling 3 totals (tornado) as I happen to type. 2 in OK and one oldie in Minneapolis from last year.

I am guessing it was an ACV policy (HO-2 or HO-3 w/o RCV) since you stated only 50% of policy was applied to contents. A RCV policy is 70% and some even up that to 80% of the dwelling amount. The current one is definitely an RCV policy as they upcharged on premium.

Some areas, due to mold issues, obsolete materials, etc that they now they would eat in a claim will only offer an ACV (actual cash value) policy as it is a guarantee they'll lose their shirts on the RCV policy. Guess we don't want them going BK on us either so I get the logic.
Like anything in life we get what wwe pay for. The trick is to get only what we need and pay that amount. :D

[FishingAddict]

Addict,

You misunderstood. According to your figures above, let me explain how they "insure" us.

Your total insured property is valued at $450,000. That is also insuring the land. When the house burns down, it only cost $340,000 to rebuild the house. The land didn't burn.

The insurance companies get special treatment by the government because of the amount of money they put in politician's pockets.

I would be looking at another carrier then Ed. I have never yet - honestly - heard of a carrier who seperates out land and Buildings/Dwellings,
Every one I have settled, and it in the high hundreds (total losses) all told, the Policy Limits are stated and applied to Dwelling/Building and Contents....and the related like loss of use, etc of course. That's what is written and called a Homeowners Policy. There are variations of the basic policy but the Limits that apply to all are spelled out on the Declaration Page. Like I said I have never seen Land listed as a scheduled part of it - be it covered or excluded.
So when the agent or whomever does his calculations to come up with the amount you need to insure to using their "model" they calculate with they should be facturing in ONLY the structures, etc. If they are attempting to load in land -----get the he!! away from them like yesterday and get an honest quote elsewhere. There are a zillion carrriers out there looking for business

[FishingAddict]

forgot to add - I don't work for an insurance company but rather am an Independent Adjuster who contracts out. I have no personal interest in ever minimizing a claim - if it is owed it gets paid. Period. Whether the carrier likes it or not. That's the way the laws read. I've gone toe to te more than once with a carrier manager on a claim and not been called back to his district but never had a customer say they were not handled fairly and in good faith. That's what its all about IMHO.
That in-house adjuster is a different story as he is an employee. Huge difference in ways one sometimes approaches a claim I guess..

[edkemper]

Addict,

I buy my house for (let's say) $100,000. I owe $95,000. How much insurance do I have to have for the mortgage company??

[Plumb Level]

Ed - I'm an insurnace agent and used to be an adjuster like Fishing Addict.

Most Mortagage companies are going to ASK for 95,000 to cover their loan. However, in Missouri, the mortgagee can't legally require the borrower to insure the house for more than it's replacement cost. But they can ask for it.

So in the instance you describe, I'll calculate the cost to rebuild the house. Let's say it is 85,000. I'll explain to the customer that we can insure it at 85k, and then our policy automatically covers another 20%, if needed, at no extra cost. so that is another 17k we could pay for a total of 102k. If they want to insure for less than 85k, they sure can. But they lose that extra 20% coverage. Also, they should insure it for at least 80% of the 85K, or they start losing some replacement cost benefits. If they want to insure that house for 95k, they sure can. More premium for us, and less likely they we would have to pay over the 85k.

If that house is a total loss and insured for 85k. At that point we look at what it cost to rebuild it. if 85 is good, then that is all we pay. if it is 92k, then that is what we pay (remember - we could pay up to 102).

And like addict says, the land is never part of the equation....unless someone buys 10 acres with a 300k house on it. maybe the 10acres is worth 100k. so that is 400k purchase price. say they do a 350k loan....within reason, we will insure that house for them for 350k, but the bank can't force them to do that. But again, if it only costs 300k to rebuild the structure, that is all we are going to pay.

One other thing, Missouri has a value policy statute. If total loss by FIRE only....the insurance company must pay the limit, even if it costs less than the limit to rebuild.