So my insurance guy is trying to jack up my replacement cost even though he said it automatically increases 3% every year.
He said he won’t insure a house for less than $200/sq.ft (a dump. His words) And $300 for nicer homes.
He said a 2 car garage costs $45,000 to build.
He also said if you don’t rebuild you will only get “depreciated” value. This was after he mentioned 3% appreciation.
I told him my friend JUST built a VERY similar house to mine for $400,000 less than he wants me to insure mine for.
FWIW I have been talking to builders to get an idea of costs. I have plans ready to go, and I’m getting rough numbers that add up to $300/sf. Bear in mind the fact that material costs are rising precipitously. And what we are looking to build isn’t nuts. So he may be right
That said, and maybe a little OT, I’m planning on acting as the GC, and relying on some construction industry friends I’ve made over the years. I am the architect for the project, and my job is to manage multi million dollar projects so it should work out. I’m thinking I can drop that number a lot, but I haven’t yet worked it how much.
PS: In your situation I’d always aim high with the number. God forbid something did happen, and say material costs did go full blown retarded, it’s best not to get caught with your pants down.
Thanks guys.
It sounds like there is a huge swing in costs depending on builder or the material costs have risen greatly in just the last month or so.
My friends house is a beautiful timber frame house (with radiant heat) that he paid a GC to build and it was only about $200/ sq. ft.
Here is another thing, my policy covers 125% of replacement already so…
Not sure the rules about promoting a non-sponsor, but from my personal experience the two guys from C&C with Farmers are a class act, and they saved both of my parents literal hundreds of dollars with significantly better policies. They’ve also really been great on all the cars for me. Talarico and Junge Agency on NFB. Just let them know I sent you, they’ll take care of you, and at the very least can review your replacement cost.
I’m sure part of the reason the insurance costs per square foot are higher than your build costs per square foot is because it costs a lot more to rebuild a house after a total loss on the same lot than it does to build on an undeveloped lot. When my uncle had a total loss fire there was a TON of work involved in cleaning up the lot and demo’ing the old foundation before they could even start rebuilding. Thankfully he had never nickle and dime’d his insurance guy and they were extremely well taken care of. Seeing what he went through, and talking to Nikuk after his fire, is why I have an insurance agent for homeowners instead of some DIY insurance website policy.
Part of my cost for building is never going to need replacing in a fire, for example: Lot clearing/site work, septic, utilities, driveway, etc.
If I have a total loss fire and they claim I am under insured, they can just write me a check for $1,000,000.00 and I will say thank you.
