I am currently paying about $425 for a one year Homeowners Insurance policy. I just got my renewal notice, and they have increased the policy cost to about $500, for the same exact coverage.
Therefore, I decided to shop via the Internet for different quotes for my Homeowners insurance. As expected, the quotes I got were all over the place, from about $390 all the way to about $650.
However, one quote stood out.........it was for $169. The fees were itemized, and indeed did add up to $169 for a 1 year policy. The coverages were what I asked for. So that "lowball" quote was evidentally not a typo.
OK......so I am suspicious. What could be some logical explanations for this extremely low quote? Any chance that it is legit? I've not yet talked with the agent offering this policy. What questions should I ask this agent? How can I assure that I would be safely covered by the policy this agent sells?
The agent is Colorado Insurance Sales and Service, located in Littleton Colorado.......the Insurance company represented is Colorado Casualty.
I'd call the agent and simply ask him or her how the cost can possibly be so low. Ask 'em "what's the catch?" Keep asking until they answer to your satisfaction. You sure don't want to get an insurance policy that has some hidden reason not to pay out. And read the final policy before you hand over a check.
you can double insure, but i'd bet they'd only pay off one (one has to be primary) and the other would cover the deductible. your contract typically has something about other insurance in it, and to not tell one about the other, is called insurance fraud. they all report to the same database for covered claims against a house, so it's not like they won't find out about it.
Insurance companies have clauses to coordinate benefits. If you have two policies, their combined payout won't be any higher. Each will pay half of what one would normally pay and you will have paid twice for no additional coverage. On the application form, they will ask if you have any other insurance on this property. Better to pay for one good policy that covers full replacement value with no deductible.
Home insurance companies are out there to make money. They have a fair amount of math, experience, and science involved in setting rates that pretty much guarantee that, in the long run, in aggregate, you will pay them more than they pay you.
Even if you could successfully collect on two simultaneous policies, all you're doing is doubling your investment in something with a negative expected value.
Some insurance companies are better than others when you have a claim. Consumer Reports has an extensive article about buying insurance, what you need to consider, and the ratings of insurance companies. I'd stick with a well-known company. Also, a few insurance companies will give you an initial low premium rate for the first year, then jack it up when your policy expires. Getting several quotes is a wise idea, then get a couple new quotes every year after that.
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.
I just did a little "googling" on Colorado Casualty Insurance. They sound legit -- one of the Liberty Mutual Group's regional property and casualty company's.
I think one of the important things to check out is an insurance company's financial ratings from A.M. Best, Moody's, and Weiss.
Here's a page that includes info, including financial stability ratings, on Liberty Mutual. Colorado Casualty is mentioned as one of Liberty's regionals.
On Tue, 7 Sep 2004 21:28:43 -0700, "Jeremy" scribbled this interesting note:
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)
Let me step in here on the "replacement" policy value. Replacement means that if your house burns down and it is 35 years old and codes have changed, it will bring your house to code.
Ask the people in San Diego whose houses burned a year ago about their nightmares of being underinsured because of no replacement coverage. Codes have changed to require tile roofing, which means re-engineering the structure, and since it is tract work, the as-builts exist for these homes. The insurance companies are paying off of these plans, but the homeowners are out 10's of thousands of dollars for the roof changes.
Homeowner insurance from the cheapest carrier is a BIG gamble, in my 30 years of homeowner insurance experience. It has paid everytime to not have a hassle with the carrier.
Please heed the advice on making sure the agent can sell in your state, that the carrier is licensed to do business in your state and that it is AT LEAST an A rated carrier. All this info can be had from your state's insurance commissioner.
On Wed, 08 Sep 2004 14:59:35 GMT, "Claudia" scribbled this interesting note:
How many homes have your personally built with your own hands? How many homes have you personally repaired and taken apart and put back together? Changes in foundation specifications and other code requirements are not that big of a consideration when thinking of cost of building. Sure, these items will drive up costs some, but not in any truly drastic way, especially when you realize that most of us don't live on tectonic plate fault lines or on volcanoes in flood plains or in the path of every hurricane that comes along.
Replacement value means exactly that. The cost to replace your home with a new home, and yes, up to current code, that was pretty much just like your old one, on the same lot.
Then there are people like me who can built a house from the ground up. My cost to replace my house would be far less than yours because I'd be doing most all the work myself, and yes, it would be up to code, and more importantly to me it would be built to my more exacting requirements which, if you had a house built just like it would probably cost you almost double what I'd spent. Why should I have to carry the same replacement value on my house as my neighbor who may have the exact same house in the same exact condition since my cost would most likely be less than his?
-- John Willis (Remove the Primes before e-mailing me)
John, you seem to be the exception, not the rule. You can't really give very good advice on how to insure a home if you would do most of the reconstruction work yourself.
By the way, replacement policies I've owned take into account the differences between the market value of the home, the value of the land, and the cost of rebuilding the structure (and the cost of replacing the contents, don't forget that).
The problem comes in when the so-called "replacement" policy actually stipulates the maximum cost of rebuilding -- in other words, essentially sets a cap on it.
While this is not a new wrinkle, a lot of policies here in the US that were originally written with no "cap" are now being renewed with a cap built into the new policy, generally without any clear notification of this change. I'm told that most policies in the USA now have this limitation. This protects the insurance company -- if the amount is higher than your policy states, they won't pay the extra amount. If the amount is lower, they still collect the fee for the higher insurance value.
The problem for homeowners and even for agents is deciding what is a reasonable dollar amount for this rebuilding value and making sure the policy states at least this value. Then as the cost of rebuilding goes up, the policy has to keep up with the increases. My policy has a built-in percentage added each year to keep up with inflation and building cost increases. The land is not insured. I've noticed that the percentage is generous enough that it now slightly exceeds what I think is the reconstruction cost. And of course, I pay for this with a larger premium.
I could reduce the amount of the coverage, of course, and lower the premium somewhat. But do I, a mere homeowner, really know what it would cost to rebuild if my house was burned to the ground? Doubtful! So like most of us poor saps, I am forced to keep the amount somewhat larger than I think I really need -- or else get some sort of re-appraisal every year, which I doubt anyone would do. And how would you know if you can trust the construction estimate if you got one? If you have ever dealt with construction, you know that the cost always exceeds the estimate.
If you are buying directly off the internet, there is probably no agent involved (nor will there be if you try to collect), which would be a substantial savings.
I would suspect that also some of the coverages are limited > I am currently paying about $425 for a one year Homeowners Insurance
Ok, I'm a little confused now... How many claims have you had to MAKE in 30 years? It's my hope to go through my entire life without ever having to make a claim on my house insurance..
I have had several claims the last few years (trees on the house from wind storm, trees on the deck from ice storm). My insurance company paid promptly and reasonably. I have no idea if they are cheapest and don't care either. So, my advice is to go with one that neighbors say nice things about and forget anything over the internet.
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