Homeowners Insurance Coverage- how much?
I know this was covered before but I can't find anything in the archives. What is a reasonable coverage amount for my Eichler? My insurance agent at State Farm thought I might need more coverage since I live in Palo Alto (building codes might bump up the cost? Supply/Demand?). We just finished remodeling we have everything done (e.g. foam roof, double pane windows, etc). I am currently covered at $263/sqft.
Also Earthquake Insurance is expensive and I don't have it. Should I??
Thanks, Lynn
First
EQ insurance, I have some sources in the insurance industry and also from expert engineers.
None of them thinks the CA EQ insurance is worth it. it's very pricey, has high deductibles and also limits payouts thus likeley not paying your damages fully (proration) if there is more damage then the fund has (there will be for sure)
So skip the EQ.
as for other insurance. i think 263 a square foot is more then enough, I guess it depends if you really think your whole house will burn down in a fire or not, (is it rocked).
I am pretty sure I won't have a fire and if I do, the whole place won't burn (rocked/updated electrical etc) so I have it insured at 150 a foot
that way my policy is only 1k a year. how much is yours? (I have a 2400 sq foot house)
lastly maximize your deductible, since filing small claims will hike/cancel your policy, why pay them for insurance you can't use (I am 2500)
good luck
Alex- Thanks for the response.
I ended up with keeping the policy the same ($263/sq. ft.) and increasing the deductible to $2K. I also increased the "building code" coverage from 10% to 25% which (if I have this right) allows for building code upgrades during reconstruction. I have 1650 sq. ft. and have recently remodeled which includes sheetrock and electrical upgrades (hardwired smoke detectors). I didn't receive any discounts for these things however. My annual premium is now $940. Declined earthquake.
My agent said that even though $263/sq ft. seemed adequate, many contractors may not be interested in taking on a messy charred house (in the event of a real fire) and the homeowner might have to pay more for a contractor to take it on.
/Lynn
