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| *Loan,banking and credit>>>homeowner insurance |
Homeowners insurance question....? |
i bought a house 2 yrs ago and the loan was for 125 thousand, insurance for the same amount, now i am trying to refinance for a better rate, and had to get a new appraisal, which came in at 207 thous, now my insurance company says i must get insurance for the 207, but all i am refinancing for is 167 thous, the 123 still owed on the original loan and then using some equity to pay off my car, my question is i am not borrowing a full 207 even though the appraisal says that, i only want to insure the amount of the new loan i am getting, the 167, they say i cant do it at just 167, i HAVE to get insurance at the 207 amount, is this true or are they full of it? You'll have to check with the insurance company, your house should be insured on the COST TO REBUILD. Now, it looks like you added two kitchens. Kitchens usually run about $50,000 each, so adding two, well, I can see where the house is worth $100,000 more. Plus, maybe you added two bathroooms? The way to handle this is talk to your agent. They need to go down to this house, in person, and do a "replacement cost estimate". If they aren't local to the house, ask them to have the insurance company go down and do it. The house SHOULD be insured for at least 90% of replacement cost. Not including land. Not including pilings, if they aren't insuring them. BE SURE TO ASK ABOUT THE PILINGS. An "appraisal" is market value, and ALSO takes the land, location, and view into consideration, so especially with a beach house, it's HIGHLY likely that the "appraised value" is more than the "replacement value". I personally have a beach house, it's a 500 squ ft fishing shack. Replacement cost on it is about $50,000 (although it's a wreck, LOL, and no carriers would touch it), but MARKET value is well over that. So it's something you can work out with the agent. Source(s): agent, 21+ years 125 up to 207???? wow you must be in a high cost area or even beachfront for this kind of uptick. And sadly yes if your home is now worth 207k then the insurance company is saying you need to insure at that so if a claim is needed the most accurate replacement costs can be used. You don't want your 207k home to be destroyed by say a hurricane and get a check for say $150k. The more the better suck it up but you MAY be able to get rid of that annoying escrow so you can put the insurance money to work in say an ing bank account and then pay it when needed. Bottom line, the bank wants to make sure (in the unfortunate event that your house is destroyed), that they get back the money they lent you or in other words their share of equity in your house. I also got some good advice from adviceontime.com, that stated in an appraisal you have two items that make up your value (land value and home value); you should be able to save money by only having to get insurance on the home value...if your house is destroyed your land value will stay the same...so why insure it????? Hope this helps. Let's assume your house was worth 200,000 but all you owed was 100,0 00. And you insured it for 100,000. Now it burns own. and they pay you 100,000. I can see you saying "I was screwed." My house is worth 200,000 but they only paid 100,000. . Well, first of all, you shouldn't be insuring for your mortgage amount, you shouldn't be insuring for your market appraisal amount. You should be insuring for the cost to rebuild with like kind & quality. You say it is a fourplex? Do you own just one unit or the whole building? That can make a difference in the insurance too. Also, now you have 4 kitchens in the building & at least 4 bathrooms. If you own the whole building, that would DOUBLE your value without the increased cost to rebuild over the last few years. Anyway, talk to your agent about replacement cost on the building. That is the proper way to insure AND you will then have enough coverage at the time of a covered loss. You don't want to be surprised when there is a fire & you don't have enough insurance & the company penalizes you for not carrying at least 80% of the cost to rebuild. Your agent can explain all of this to you. no u DON'T HAVE to get insur. at 207 question is how much it cost to rebuild your house.150--160--170. dishonest agent. |
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