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40% of homeowners UNDER INSURED?

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Cedrus

Member
What is the name of your state? Oregon

I keep reading that about 40%, or more, of homeowners are under insured by a huge amount, say 30%, for their rebuilding costs.

Price of lumber and other materials go up, year by year; labor cost could go up, depending if your are in a urban or suburban area,

Insurance companies use Boekhe (?) index to figure rebuilding costs per square foot.

We talk to local building contractors once a year and try to get a feel for real world, per square foot, rebuilding costs. When were in CA, we went for $225 a s.f.; here in OR we are still $225 area.

If a fire or some other disaster wipes out a bunch of homes in an area, the contractors have the upper hand and will quote you a higher than normal price. If you say no, they will not care. They have their usual business and can find another homeowner who will go for their price.

Are some h/o actually under insured and do they have to dig into their own pockets to come up with some $$$?

I realize the foundation is not figured into the rebuilding costs. But bringing up an older home to existing codes could be expensive.

Does anyone out there have a clause written into their h.o insurance policy giving them the right to cash out, not rebuild and move to another area and buy an existing home or rebuild in another location?

Am I a worry wort? :confused:
 


Cedrus

Member
Guess this did not resonate with anyone.

I'll just assume that y'all have checked your H/O policy and compared your rebuilding benefits to local building costs. And are satisfied. :cool:
 

moburkes

Senior Member
Since the majority of people don't own their homes, cashing out isn't an option, but, yes, you can purchase, for an additional premium, less coverage than you actually need. Understand, though, that in a partial loss, you will only get paid a percentage of the damage. For example, if you're only insured at 60% of replacement cost, you will only receive 60% of the cost to repair.
 

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