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How much is your Eichler insured for?

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Joined: Jan 29 2004

I got my State Farm homeowners insurance bill a couple of weeks ago. If you divide my in$urance coverage by the square footage of the house, turns out I'm covered for about $150 / square foot.

I had read an article in Consumer Reports about homeowners insurance. It said that in many parts of the country (including the bay area) people are badly underinsured because of steep localized increases in the cost of new home construction. So if it costs $300,000 to rebuild your home and you're covered for $250k, you're out $50k.

According to my agent, local costs are
$150/sq for a tract house
$200/sq for a semi custom house
$250/sq for a custom house.

Sure, this is a tract house. But I'm wondering how my coverage ($150/sq. ft) compares to that of other Eichler owners. More importantly, I would be interested in know what the average reconstruction cost of an Eichler-style home turns out to be. Obviously, much depends on the plans and customization.

Thanks,

Robert

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Joined: Jun 28 2003

Hello Robert,

I think I had the same concern as you when I bought my Eichler. I have replacement costs -- or something like that. The replacement cost is less than your purchase price because the purchase price includes the land. When I queried my insurance agent about rebuilding an *Eichler* if my home is ever burned, he dismissed my home as "just a post and beam." Well, it may be a post and beam home, but it's still an Eichler.

If an Eicher is ever rebuilt, it won't be same quality. The wood in my home is 50 years old (built 2/16/54), the paneling is 50 years old, the cork tile is 50 years old. The fence along one side is 50 years old (the rest is 1 year old). And you can't get that quality any more.

You can build a post and beam home, but you can't build an Eichler anymore.

David
Mountain View

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Joined: Mar 20 2003

Interesting that you bring this up; I thought about this recently as I paid for my yearly insurance, which seemed kind of low for rebuilding in the event of a disaster. I also thought about this when all of the S. CA fires hit and they were 6 miles from my house! At that time I figured there was no way they would allow me to up the amount...but perhaps some months later I could. Thanks for reminding me--I'm also interested in what others have to suggest.

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Joined: Feb 2 2004

Has anyone on the network had their home rebuilt after a fire or major teardown? How would you get an architect and builder (and the insurance company) to honor the Eichleresque details? I am sure they could build a ranch with forced air heating and stucko walls, but what about the glorious luan panels, and radiant heating, tounge & groove, large windows with narrow frames, etc? Likely some things will be more difficult to do due to new building codes, but even so, it can be done in a satisfactory way by careful selection and attention to detail (seen from a terrific "new Eichler" recently built from the ground up in our neighborhood).
My question is - will this be the case with my insurance from Farmer's...?

Silvia

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Joined: Aug 28 2003

We talked to our insurance agent and explained some of the Eichler details in our house such as radiant heat etc. He said that "replacement costs" don't cover wood paneling, concrete slabs, or radiant heat. Replacement costs are predicated on the average ranch style home. So we are under insured and would probably have to pay out of pocket for these things if our house burnt down.

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Joined: Jan 4 2004

Hey Bob-
Hope your marathon went well. You know, I'd suggest first getting an appraisal of the structure w/o property value factored in. It is difficult for some appraisers it is do-able. I would suggest bringing the results to your ins. agent and asking him for suggestions. Also, as far as building costs in this area, there certainly is a substantial range, (I know when I do additions, the range is all over the place due to the vast selection of fixtures, appliances, millworks, tile and other finishes); I would say that it is possible to build for $150/ft; but you'd have linoluem, and other lower end finishes (replacement lauan paneling is about half the cost of drywall, but it creates a condition which the local firefighters refer to as "7 minute " homes, and most building depts. wont allow it; however, if you cover drywall, without all the finishing coats, it works out being close).
Be mindful that you would wind up with a modern version with (sensible updates such as tempered double glazed glass, adequate insulation, electrical and plumbing properly routed overhead, to name a few). Where finishes are concerned, original Eichler finishes were not high end in the scheme of the times, so if you follow that schedule of finishes (formica, linoluem; inexpensive cabinetry, appliances and fixtures), you probably wiil be ok.

renman

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Joined: Apr 10 2003

There was an Eichler rebuilt from the slab up from a fire-they even had a website it mighta been linked from the eichlersocal website ya might contact them for more info. They rebuilt with dual panes, new HVAC, sheetrock etc. but it still looks Eichler from the street-it's I think in the Fairhills tract in Orange. Good Luck.

Wishing for modern home.

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Joined: Jan 29 2004

renman wrote:
Hey Bob-
Hope your marathon went well.

How cool of you to remember. Were it only so cool in Napa. Finished just over 4 hours. I blame the heat. On the other hand, a 75 year old British guy ran it in 3:40. On the other hand, he's holds the 70+ world's record for a marathon (2:58).

Thanks to everyone for the ideas and suggestions about the insurance. Sadly, I'm not commited enough to this issue to get rebuilding quotes, track down rebuilt Eichlers, etc. I also wanted to see what other people were insured for per square foot, but nobody else has opted to compute and post that info.

Based on Jon's comments, it sounds like I need to bump up my coverage a bit. Another consideration is that a complete loss is a fairly unusual event. So my coverage will probably be sufficient assuming the damage to the house is not complete.

And even if there is some event, insurance companies are notroriously good at finding ways NOT to pay off claims. My personal fave comes from The New Yorker magazine: The life insurance policy of a guy found dead in his trunk (nine bullet holes) was not paid off to his widow because the insured failed to disclose (on his application for life insurance) that he had diabetes. I'll bet someone got a nice bonus for that one!

Robert

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Joined: Apr 2 2003

Ok, since no one else answered, I'll give you my info on insured costs.

I couldn't find the exact message but at one point there was a discussion about replacements costs in which, I think, KC Marcinik of Greenmeadow Architects talked about rebuilding the Sunnyvale Eichler after the fire.

I don't remember the exact figure but I think the discussion ended up that Eichlers are more custom than standard. The end result was that I upped by insurance. There has been a renewal or two since (with the attendant % increase), but it looks like I currently have my 1770 sq. ft. or so Willow Glen Eichler insured for $388,000 *replacement cost*. So looks like it was about $210 or so a sq. ft.

Two things to note:

- One is that you should discuss with your agent exactly what happens in common situations--a fire rebuild, for instance. When the policy says they will "replace with same or similar quality materials", will that basically guarantee radiant heat? (it should) Also, what is the glass coverage (some policies have special glass limitations).

- The second thing to note is that a loss is calculated as a % of the home (NOT $ of damage) then that % is applied against your coverage to determine your claim. So, if your loss is deemed to be 50%, then you will get 50% of your insurance coverage.

People sometimes mistakenly think its the dollar value of the loss so they try to save money by insuring for say 100,000 and think as long as the amount of damage they suffer is less than 100,000 they'll be covered--but of course, they aren't.

So, suppose your building alone is worth $350,000 and you suffer 50% damage. If your insurance coverage for the building is $350,000 then you will get $175,000. However, if your insurance coverage for the building is only $200,000 then you will only get $100,000 (.50 x 200,000).

Likely you already know this, but it might be news to some.

Jake
P.S. I'm no insurance expert so if someone who is want to clarify, extend, or correct what I've said, I'm sure we'd all be glad to hear.

eichfan at rawbw dot com

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Joined: Jul 1 2003

I was surfing the site at work so I did not carefully read the prior postings, and am not an insurance "expert". But here goes ...
You should ask for Guaranteed Replacement coverage on your homeowners insurance. This is intended to provide a new home in case of an actual or constructive total loss - - it typically pays up to 200-250% of the insured value. When you buy this, the insurer will ask for square footage, and then caluculate FOR YOU an amount of insurance you must buy. In my case, it varied from $150K to $225K (1,601 sf) - - you don't have a choice in this amount - - Guaranteed Replacement will then provide up to 200-250% of this as long as you pay a premium based on what your insurance company tells you to insure.
Calculating actual replacement cost is an interesting exercise - - I suppose it has the characteristic of a car - - the individual parts/labor are several times higher than the whole unit (OK, renman, jump right in on this if you like).
My insurance company thinks it's $100-$150/sf, so it's OK with me. The County of Santa Clara's Tax Collector assigned less than 20% of my 2003 purchase price to the house (thus, Santa Clara is appraising the land at 80%, and you don't insure land. Since South Bay "houses" are selling at $350-$450 (not the ritzy towns like Los Altos, Saratoga, etc.) which includes land, I would think anything over $200/sf for the house (excl. land) is on the high side based on these market indicators, but, hey, I'm no expert on construction estimation.
As a parallel issue, it will be interesting to research whether the insurance company will pay "increase cost of construction" - - i.e., the extra cost of improvements to meet code when re-building. The insurance company may just pay for a 1960 Eichler which doesn't meet code in 2004. I am now intrigued by this question since my Guaranteed Replacemnet coverage may have a gap.

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Joined: Jun 14 2008

Dredging up a very old thread here, but it seemed relevant...

My insurance renewal just came through and I'm being quoted to insure a $312/sqft rebuild cost (1,250sqft in Charleston Meadows). This, to me, seems excessive; I did argue with the broker about rebuild costs last year but lost the will to live half-way through the argument and just gave in.

Is it really going to cost almost $400k to rebuild a 1,250sqft Eichler even in Palo Alto? Our house is very nice, but we didn't go for the gold-plated kitchen countertops...

Can anyone comment on what they're insured for, per sqft? At the moment I'm feeling slightly like the broker is laughing all the way to the bank!

Thanks,
Hugo

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Joined: Mar 16 2005

I think $312/sf is high for a complete rebuilt -- it does cost $300+/sf to do an addition, but less from scratch. Architectual fees for a complete home will be about $20K alone.

Re-read Brookworld's posting again; ask for Extended or Guaranteed Replacement Cost coverage. Guaranteed RC is no longer acvailable. Extended RC coverage will pay a % over the coverage amount - 50% to 150%, if you buy the amount specified by the insurance company, but you could argue that $250/sf is more than adequate. Your insurance policy has a disclosure page that lists the options and what you selected.

You will also need Increased Cost of Construction of coverage. I disagree with an earlier posting - - if you have single plane glass and other 1960 standards, that's what you're covered for even if the coverage amount is higher - - you won't get double pane glass, earthquake bracing, heavier post & beam construction for 85mph winds, customized wiring, etc. You get what Joseph Eichler put in, not what is required by Modern code. If you're under insured and you can't pay the difference, you won't get your plans approved or pass inspection in 2009.

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