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Greetings All,
The other day, while I was at work, someone entered my home and helped themselves to some of my stuff. Fortunately they were basically lazy and took my old 486, some other small stuff, and NONE of my tools (seems pretty obvious they don’t like working for a living). I’ve got “Replacement Value” homeowners insurance, and my general question is: Any advise on how to deal with the insurance company? I already know what to do about the intruders. My cat, however, liked his new friend, ’cause the thief left his food storage cupboard open. When I got home my cat looked like a football with a tail.
Thanks,
Ken
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Ken Replacement value! You Lucky stiff. Present bogus reciepts (486 becomes AMD Athlon 700) don't forget the flatscreen TV, Polk speakers and a couple nice suits and a Rolex. Deposit the check and when You get out of the slammer You should have a nice nest egg for starting over. Okay I missed the point. But if you have replacement value You should get enough to replace what you lost as opposed to getting what the items were worth at the time of the heist. Deal with them straight up and you should be fine. Sorry about the misfortune and hope you make out okay. Thank goodness they didn't get the cat. Skip
*Documentation. More is better. Go through your old photos for shots of the missing stuff. Look for receipts or charges on credit card statements. Take as fair warning to video tape everything else in your house NOW. Saw a friend swing into action when another friend's insured house burned down. She thought of everything (old eyeglasses, prescription drugs in the bathroom, etc.) that would be legitimate to claim. Don't forget to bill them for the Feline Jenny Craig Program! -David
*Most replacement cost policies only pay the Actual Cash Value (what the stuff was worth before the theft - 486 worth about $12.00) up front, and will pay you the balance of the cost of replacing the stuff, after you have bought a new one.Don't forget about that pesky deductible. It would pay to determine if the loss is above your deductible before you turn the loss in.Good luck. The other option is is to break intothe house down the street, and make up for what you lost.
*Makes you think how useful that cat is. Maybe 'replacement value' will get you a Bengal Tiger.
*I had my camera bag stolen while we were on vacation in Vancouver a couple of years back; we were absolutely honest with the insurance company, including the fact that I had the Spotmatic F and a lens with me when the bag was solen; and, they treated us very well. My options were: take cash based on an expert opinion of the actual worth of the items stolen, or, go to their designated camera store and buy whatever I wanted and they would cover up to the "logical replacement" value of the items stolen minus deductable in both cases. To decypher that: my old 50mm F1.2 macro lens was only worth about $150 used, a brand new 50mm F1.2 macro of the same quality would cost about $550: I could take the $150 or spend $550 on them. Multiply that across several lens, some filters, strobes, bag, my wife's Nuvis, etc. and you get the picture.
*What's "replacement value"? That's a good question. I've been going around in circles with my insurance agent about that very question. With portable consumer goods, I think that Chris' answer is right on the mark. What about a house? I live in an older section of town which has become a more "desireable" place to live since we purchased 17 years ago and housing prices have been going through the roof in this neigborhood. I looked at our insurance policy and thought that we were way under-insured. My insurance man explained that we had replacement value and that, in our case, that would be considerably less than market value. Also, if we had a total loss, the city lot would still be there so we should deduct the cost of the lot from our insurance needs. Ok, I could understand all of that but, at a little less than $100 per square foot of replacement value, I still thought I was under-insured. I checked with my architect-neighbor and he said that $100 per square foot was at the very low end of building costs in our area and that it wasn't uncommon to find houses coming in at $200 per square foot. He thought that $150 might be more reasonable for my house. My 120 year old house isn't fancy but it does have lots of custom molding, full plaster walls, some nice porch details, and other elements typical of that era. My insurance company used to pay to have those elements duplicated under "replacement value" but no longer does so and claims that no other insurance companies do so. Anyway, I increased our coverage to about $150 per square foot to take care of those features if we had a serious loss. Well, last month the insurance company sends me a letter saying that I may be "over-insured" and they will only pay for "replacement value". Urgh, I'm right back where I started from. Has anyone else had this experience?
*Look into the words "Garaunteed Replacement Coverage"Supposedly replaces item for item regardless of age30" TV will be replaced with a new 30" TV with no depreciation taken off.A friend's home was struck by lightning this summer; every electronic appliance was fried. All was replaced with new, no questions asked.I have that clause on my insurance (State Farm), hope I never have to test it.
*Ken, we were burgled in Jan '97 and had replacement value on our state farm policy. what that did for us was that the insurance company would pay for a new replacement of the item and if they were not available due to discontinuance the next best model but a receipt of replacement was needed. if we opted not to replace the item we were paid the "fair market value" of the item and they were'nt too stingey (sp?)I'm kinda anal about keeping receipts and the likes so it went real smoothly for us. State farm and other insurance also have programs were the will buy you the replacement (they have contracts with lots of manufacturers) and usually it comes with a better warranty and stuff thatn the original did. something to look into.
*Get a different insurance agency. Shop around. They are ripping you off, and will conntinue to do so as long as they think you will take it. If you shop around, and let all the agencies know you are doing so, you may find the actual insurance coverage you want for even less than you are paying now. One caveat. Most will offer you a great deal to get your business. Then somewhere down the line change your coverage and make you pay more, etc. (Just like the credit card companies. And just like the current insurance company seems to have done.) So, whatever you do, get anything you want guaranteed... In writing.
*Chip Tam... You are on the mark about an entire house. Even with Guarantted Replacement, I believe they will not replace the elaborate, ornate mouldings, wide plank wood floors, etc. I think it is one of the dirty little secrets the insurance company does not want you to know.That being said, I would always buy the replacement provision on the dwelling, and in the event of a loss, press them to live up to the spirit of the contract. Educate yourself on the policy language, and make an intellegent argument. I can tell you with certainty, any ambiguity in a contract, and the courts always swing to the guy who bought the contract, not to the guy who wrote it.replacement cost coverage on personal effects always will go smoother with "stuff", and I'm betting usually not so smooth on the dwelling.Luka, an insurance company cannot change your coverage without notifying you. They also need to make the change to the contract (at renewal only) to everyone.
*b WBA At Your ServiceWe are talking about 2 different things here, structure and contents. The contents can be insured with a replacement value policy that protects you as described above. Most companies offer similar policies for this coverage. Things are a little different with the structure. Certain companies such as State Farm, Erie, and Chubb have special policies that do not put well defined limits on the cost of replacing a damaged structure. A dwelling covered under these policies that is totally destroyed in a fire will be rebuilt exactly as it stood no matter what the cost. They all have different names for it, I think State Farm's is called Guaranteed Replacement Coverage. The coverage is usually intended for unique structures that are difficult to estimate replacement costs. The policies are becoming more commonly used on less unique homes, I have noticed. The insurers generally demand that their agent does a thorough inspection of the home and makes maintenance recommendations to the homeowner to protect their investment. My experience up until now has been very favorable concerning these policies. Most insurers have been comfortable paying some really expensive claims (justifiable) and the homeowners didn't feel the need to call a lawyer or a public adjuster. (Both generally tend to slow matters to an excruciating crawl) The demeanor of the company adjuster who handles the claim can make a huge difference. The person that has the greatest effect on a property damage claim is YOU the insured. If your policy says you deserve it, but you're getting the runaround from your adjuster, don't give up. You must keep pushing. After all, it is YOUR money. The whole process can take alot out of a person, but I guarantee if you push the issue, you are going to get what you deserve. Again, it depends on the adjuster. Sometimes it is necessary to have the company replace the person during the middle of a claim. This is a rare occurence. In order to assist homeowners putting a value on what they deserve, our company provides a service (for a fee) where we do replacement estimates on existing buildings. While the estimate is not highly detailed, it gives a person a valuable document to use in determining one's insurance needs.
*It all depends upon the particular insurer as to how you fare. My particular insurer has a top two rating for claims, and my particular replacement value claims have been fairly painless. You have to show you owned it (pictures work, as was stated earlier). I love these lower premium advertisements without acknowledgement of claims policy. You get the coverage you pay for.
*I have replacement value...extra $50/yr....Had a bike stolen in Florida...Was reimbursed without a snap for a new one....near the stream,aj
*To Ken BergReplacement value usually means just that - if you can find a duplicate item the cost to purchase same.If duplicate cannot or is no longer available, the nearest you can get to that item. Receipts help, but they will depreciate the value for time owned.Stay on good terms with your adjuster - he/she is the best friend you've got right now.
*To Chip TamIs the letter from your agent or the insurance company? In either case, hang onto the letter as back up in case of a loss and they try to tell you that you are under insured. If they state insurance was only - say 80% of value - then they pay 80% of replacement. (catch 22, huh?).Home insurance is based on the value to rebuild not market. Is your house unusual in your neighborhood - bigger, more trim etc? If the letter is from the insurance company, and not your agent, then they may be looking at square footage in your area and not the house itself to determine "over insured". They should have an adjustor in your area that could determine this. Ask for a ruling in writting and see what they say.
*To Chris, Tim, and Cc Roger:Thanks to you and to others for the feedback on my question regarding replacement value on a house. I realize I need to get back again with my insurance agent but this will be the fourth or fifth time this year. The agent did a walk-through of my house last spring when I expressed concern about being "under-insured". He said that he felt that my current coverage (around $90 per square foot) was adequate but that he would increase the coverage (and, of course, the premium) if I wished. Based on discussions with my architect-neighbor about local building costs, I increased my coverage to $150 per square foot. The letter saying that I probably was now "over-insured" and that they would only pay the "replacement value" came from the company's home office (State Farm). I guess there are two problems I need to resolve. Who is correct about local builing costs (the insurance company or my architect-neighbor)? Second, what will the insurance company replace under "replacement value"? As I mentioned before, we don't have a super-fancy house but it is 120 years old and does have some charm. Anyway, there are features I would like duplicate if we were to suffer a total loss: plaster rather than drywall, custom rather than stock wood moldings, some fancy porch details, a rather nice custom kitchen if I do say so myself (I'm a cabinetmaker), etc. But, there's no sense in paying the extra premiums if the insurance company insists that "replacement value" means off the shelf items. Again, thanks to all who responded to my question.
*Chip,Many insurance companies are uncomfortable with "overinsuring". Their thought is overinsuring leads to arson...$$$$Martin
*Martin,I can understand that insurance companies would be uncomfortable with "overinsuring" in cases where the replacement value is higher than market value. But, in my case, (even at $150 per square foot) replacement value would still be well below market value.
*If you want to know how insurance companies can work, read John Grisham's book the Rain Maker. In summation, some insurance companies will screw you as a matter of course and IF you make a big enough stink they might then decide that it's cheaper to pay you then hire a $300.00 hr. lawyer to fight you. They really aren't too worried because they just jack up the premiums and get it back. Then if they have too many claims they go whining to congress about how they don't get an adequate return on their investment and somehow they should be given protection from the trail lawyers. Be fair, if they won't be fair in return then sue the S.O.B.s believe me, they won't take it personel. The hard part is you may have a relationship with your insurance agent and are worried that if you mess around the rest of your policies will somehow be in jeporedy. Doesn't work that way. Your agent gets paid a commision and he should be willing to take a little heat from his office for your commision. If he passes on the company line then he's not working for you, he's working for them. You have no loyalty. If on the other hand he treats you right and fights for prompt, fair, payment then you should be loyal and reward him with all of your policies, low rates usually means low service... Not always, but usually.
*b WBA At Your ServiceChip, You received a letter from State Farm's home office saying "You are 'probably' overinsured" ? Is that how they qualified it ? How did they qualify that they would pay "replacement value" in repairing your home ? Was a maximum dollar amount stated ? As far as your question about who do you trust as expert in estimating sq.ft. rebuilding costs, I think you already know the answer to this one. If you are serious about this, why don't you hire your architect along with a reputable builder to put together an estimate to replace your house as it stands. This would have to include all demolition costs including your foundation. (Explosions can destroy home and foundation.) If you have on site septic, check to see if you have coverage to repair or replace your system if it becomes contaminated by a heating oil spill which occurs during a loss i.e. fire.(if you have oil in your home) Get the estimate on paper and present it to your insurer. If your agent doesn't go to bat for you now, he certainly won't come crunch time when you have a major loss. It would then be time to seek a new insurer.
*Q: What is "replacement value"A: Read the definitions page in your policy. For most this means the insurance company will rebuild in like quality to what was destroyed. Or, it will replace a covered item with a like item. But, the insurance company rules so make them explain it to you.Q: Is there is problem with being "overinsured" or "underinsured"?A: Again read YOUR policy. An Insurance Company doesn't want you underinsured because that means you will not have paid enough premiums in relation to their loss payment to you. On the other hand they could care less if you are overinsured. All that means is that you will have paid more premiums than you had to to get the same loss payment.In short the questions you ask here need to be asked of your insurance company. Not your agent; your insurance company. They are the one's who will interpret the policy and handle the claim.
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Greetings All,
The other day, while I was at work, someone entered my home and helped themselves to some of my stuff. Fortunately they were basically lazy and took my old 486, some other small stuff, and NONE of my tools (seems pretty obvious they don't like working for a living). I've got "Replacement Value" homeowners insurance, and my general question is: Any advise on how to deal with the insurance company? I already know what to do about the intruders. My cat, however, liked his new friend, 'cause the thief left his food storage cupboard open. When I got home my cat looked like a football with a tail.
Thanks,
Ken