ITVSME
Freshman Member
- Joined
- Dec 7, 2013
- Professional Status
- IT Professional-Appraisal Related
- State
- Ohio
This has all been very entertaining to read.
Your values will need to be increased and the rate is going up too, and the underwriters aren't asking.
They will non-renew your policy without a second thought.
Ask your agent (and a second agent would be a good idea) to work up a current replacement cost estimate (cost to rebuilt, not the M&S book cost approach).
If you can't afford the premium, you have some options: 1) increase the deductible (probably most cost-effective option), 2) shopping for a better rate from a different agent.
P.S. You can tell each agent you're considering that you want to save premium and make up a low number to report as the value; the one that tells you to leave is this one you want.
Deliberately under-reporting the value can lead to very serious problems with claims recovery: denial (for misrepresentation and fraud), coinsurance penalty (report for 50% of RC = recover at 50% - even on small partial losses), and not having enough limit to rebuild in a large loss.
Not having adequate limits is the problem faced by homeowners in the wildfire zones.
Lying about the value, the age, the square footage, or any property conditions or prior losses is a very bad idea - it's fraud and they have lawyers that do this every day.
If you think you're smarter or cleverer than the underwriters, you're wrong and they won't be amused that you tried.
A lender may place a minimum limit they'll accept for insurance based on the outstanding loan amount, but that won't help you - the lender gets paid first and won't let you have money until repairs have been made, or in progress payments. If don't repair, the insurance company will only pay depreciated actual cash value, and the bank will take their cut first. The bank probably won't let you settle for buying ACV coverage. If there's no loan, you can consider ACV coverage, you'll have fewer options for carriers willing to offer that option, and you'd probably regret it if you had a loss.
What you described as "I just want $1MM" is called a sublimit. You report the full replacement cost but ask for just the recovery up to $1MM. It's fairly common to sublimit for the perils of Flood and Earthquake, but not for Fire. Big accounts have the sublimit option, but it may not be available to a small property owner (especially is there's a mortgage). You can't pretend that $1MM limit on a $1MM RC building is the same as $1MM limit on a $25MM RC building.
In a wildfire, flood or earthquake scenario you might try and hedge for some FEMA assistance, but FEMA won't be an option for a fire at just your property.
Good luck.
Your values will need to be increased and the rate is going up too, and the underwriters aren't asking.
They will non-renew your policy without a second thought.
Ask your agent (and a second agent would be a good idea) to work up a current replacement cost estimate (cost to rebuilt, not the M&S book cost approach).
If you can't afford the premium, you have some options: 1) increase the deductible (probably most cost-effective option), 2) shopping for a better rate from a different agent.
P.S. You can tell each agent you're considering that you want to save premium and make up a low number to report as the value; the one that tells you to leave is this one you want.
Deliberately under-reporting the value can lead to very serious problems with claims recovery: denial (for misrepresentation and fraud), coinsurance penalty (report for 50% of RC = recover at 50% - even on small partial losses), and not having enough limit to rebuild in a large loss.
Not having adequate limits is the problem faced by homeowners in the wildfire zones.
Lying about the value, the age, the square footage, or any property conditions or prior losses is a very bad idea - it's fraud and they have lawyers that do this every day.
If you think you're smarter or cleverer than the underwriters, you're wrong and they won't be amused that you tried.
A lender may place a minimum limit they'll accept for insurance based on the outstanding loan amount, but that won't help you - the lender gets paid first and won't let you have money until repairs have been made, or in progress payments. If don't repair, the insurance company will only pay depreciated actual cash value, and the bank will take their cut first. The bank probably won't let you settle for buying ACV coverage. If there's no loan, you can consider ACV coverage, you'll have fewer options for carriers willing to offer that option, and you'd probably regret it if you had a loss.
What you described as "I just want $1MM" is called a sublimit. You report the full replacement cost but ask for just the recovery up to $1MM. It's fairly common to sublimit for the perils of Flood and Earthquake, but not for Fire. Big accounts have the sublimit option, but it may not be available to a small property owner (especially is there's a mortgage). You can't pretend that $1MM limit on a $1MM RC building is the same as $1MM limit on a $25MM RC building.
In a wildfire, flood or earthquake scenario you might try and hedge for some FEMA assistance, but FEMA won't be an option for a fire at just your property.
Good luck.
