The cost of rebuilding
Q: Dear Bob, I have been paying about 3 times more in property insurance than my neighbors. Insurance companies are slowly showing up out of storms. I talked to a couple and the cost to rebuild my home is always a problem that I have trouble with. I know the market value of my home has nothing to do with the cost to rebuild it. Yet, each company gives me a different value. Even the bandits I have a different lower rebuild cost. How do I find out, on my own, to get a number that I can believe and trust?
Thanks for helping us dummies out. I know it takes what little free time you have to do it. Just letting you know it is appreciated.
Paul Q.
A: Paul, there is not a problem in asking. Until I got some answers, I had no idea, and was one of those dummies-hope this helps. A quote from Ashley from Mitch Colliers agency, for all the rest of us dummies.
“Mr. Jeffries, the question “how do I find out, on my own, to get a number that I can believe and trust?” depends on the relationship you have with the person providing you with you “contractors.” Insurance companies, property adjusters and other types of service companies usually use a third-party software that specializes in determining the replacement cost of property. For example, we use a software called xactvalue a product of xactware. This company updates its component pricing every quarter to keep up with the changing cost of materials and labor. The company will use prices relevant to the market in which the estimate is being created. (Cost of building in Dade County could be more than in smaller counties for example).
“The amount of detail that can be entered is enormous and a more accurate cost estimate will result. The software will do the job if it is used to its full capacity. I would recommend the estimates inputs to determine if the information entered is accurate. You can find these on the estimate copy that we use. Remember, the software is only as good as the information entered into it and if you can only provide general details of your property then you are most likely to get a general estimate. The alternatives are appraisals and contractors statements showing the cost breakdown. Again you are at the mercy of the person/company calculating and putting the information together. Have you ever built a house? If so you probably ended up spending more than you were originally told for whatever reason. At the end of the day the techniques for most insurance companies, adjusters, and contractors can be fairly straight forward if trained and properly applied. As these methods have been proven to be accurate estimating tools it’s important to the insured will always be responsible for making the decision on how much coverage they need to carry using the guidance of the professionals they trust. If there are doubts about the numbers provided get more than one opinion and compare (as we do in real estate). Usually somewhere in the middle proves the best.
I hope you will find this useful. Please call us if you have any additional questions or need clarification. This information is the sole opinion (very good) of Tim Collier Insurance Agency, and does not necessarily represent the opinion of State Farm Insurance Companies.”
I have communicated with Paul and he is very happy. I hope the rest of my readers (if interested?) are the same.
I myself learned something very interesting.
Bob Jeffries, Realtor,
Century 21 Birchwood Realty, Inc.
4040 Del Prado Blvd., Cape Coral, FL 33904
239-540-6659 Office 239-542-7760 Fax