Why does the cost Vary so much?

[Mark2365]

In Arizona, I received quotes for Home insurance.
Regarding ONLY Coverage A (dwelling replacement):
Farmers will pay up to $339k, costing me $483,
State Farm will pay up to $270k, costing me $1159.
Thus, State Farm offers a Lot LESS coverage for a Lot MORE $.

Of course, both State Farm and Farmers have their actuarial tables
that dictate the cost of building a house in this zip code.
Those tables CANNOT be so Very different.

WHY does that one line item Vary so much from different insurance providers?

Thanks.

Mark2365

 

[LdiJ]

In Arizona, I received quotes for Home insurance.
Regarding ONLY Coverage A (dwelling replacement):
Farmers will pay up to $339k, costing me $483,
State Farm will pay up to $270k, costing me $1159.
Thus, State Farm offers a Lot LESS coverage for a Lot MORE $.

Of course, both State Farm and Farmers have their actuarial tables
that dictate the cost of building a house in this zip code.
Those tables CANNOT be so Very different.

WHY does that one line item Vary so much from different insurance providers?

Thanks.

Mark2365

There has to be more variation in the coverage than you are aware of. However I will tell you that State Farm sets insurance rates based not just on the cost of replacing the dwelling, but also takes into consideration the neighbor where the dwelling is located, and it's crime rate.

 

[zddoodah]

Your question raises no legal issue.

 

[quincy]

No legal issue ... but adjusterjack perhaps can provide some insight.

 

[adjusterjack]

The premiums do seem way off for the amounts of coverage in both examples. But I don't know where the OP is and I can't see his quotes. I'm not going to be much help without them.

 

[ALawyer]

Something seems way off, and without knowledge of exactly what coverage was quoted, or the claim/loss history of the applicant, the home or the neighborhood, I suggest getting additional quotes from such quality insurers as USAA (if eligible) or AMICA, and from one's auto insurer as well.