Odd homeowner insurance quote

[Claudia]

3 water claims - 1 vandalism - hose through the cat door at full speed - water up 5 inches inside part of the house, 3/4 carpet removed; 1 broken toilet tank upstairs in a townhouse, that ran ALLLLLLLLL day with asbestos in the acoustic ceiling; 1 undersink hot water supply line that decided it was old and tired. 1 fire claim - minor damage - just hassle; 1 liability slip and fall at a party. Then there is the car insurance with the same carrier that lowers the premium overall, which was nice to have when someone decided that my front end was in their way. I love Allstate and AAA, not the cheapest, but talk about no hassle - including setting me up with somewhere to live and boarding for my cat.

And I are an insurance agent - altho life, health and disability - I wouldn't sell casualty if it was the last job on earth.

With all the insurance I have - home, car, health, disability: I am ahead about 20X for premiums paid vs. benefits received.

And I did take Allstate on for their replacement cost assessment, for which they just lost a huge class action suit in California. Because it wasn't going to cost no $200/ft to replace my single story, slab constructed house in Sacramento. The deal we struck was they would write me a check for full value if the house was a total, and I got to pocket the difference. All of a sudden the replacement cost of the house changed to a way more reasonable $130/ft and I would still come out ahead with primo everything.

So YEAH I know more than the average bear about insurance, altho not a whole heck of a lot about plumbing. ;-)

[Joshua Putnam]

Actually, that's what some insurance companies now do -- instead of storing a preset dollar amount in their computers and increasing that by some blanket percentage every year, they're storing dozens of data points on the home and running a new replacement cost estimate every year at renewal. Most don't invent the formula themselves, they use Marshall & Swift/Boekh or the like, with regional factors for labor and materials costs. This does require the insurance company to know more about your home, but it also allows a more accurate increase in cost for different styles of construction. And it helps avoid E&O claims when you have a total loss and discover your automatic increase was indadequate.

[Tom Miller]

Maybe that's the formula mine uses. I don't actually know what method they use for their yearly escalator. The amount always seems a little high to me -- but as I said, I still don't know what the real amount should be and have no convenient or trustworthy way of finding out. I think it is prudent to be conservative on this issue, so I let the higher figures the company provides stand. I am sure that their figure is not too low, at least.

The policy also has replacement value insurance for the contents of the house, too. This also rises yearly by some escalator, although it does not rise as rapidly (which makes some sort of sense). Of course, there is no way for the insurer to know if we have bought new furniture or not, or how much the value of our antiques has risen.

What I think is that basically a "replacement policy" is no longer really a replacement policy. No matter what formula or percentage is used, setting the upper limits is still conjecture and knowing what the replacement value is still boils down to negotiation after a disaster. Fortunately, my insurer currently has a very good industry reputation, and friends of ours whose home unfortunately burned to the ground were quite satisfied with the eventual settlement.