Having been involved with rebuilding thousands of properties from every type of catastrophe imaginable, it's been my experience that the insurance companies don't make a habit of valuing policies too high. I have seen maybe 1%-2% of insurance policies being overvalued. I have easily seen a third of insurance policies valued too low for many different reasons. It's the property owners responsibility to know and understand these policies and sadly 95% of policy owners don't know what their buying. When limits are reached, you're done. Unless an E&O policy can be utilized if the broker made a mistake, when limits are reached, the well is dry. Its buyer beware folks and what you can sell your home for has nothing to do with the value of an insurance policy!!!! betaiota has some good points and many other variables need to be considered. The replacement policy value tends to set the basis for other coverage's such as contents, detached buildings and additional living expenses. So if your replacement value is low, you'll likely be low all the way down the line. Most insurance adjustors will allow you to move expenses from one bucket of policy money to another but once limits are reached, it's over. Keep in mind policy limits are affected by emergency services to the building, demolition, debris removal, cleaning and professional fees such as architects and engineers. Code upgrades which can be a big issue in older properties also can affect policy limits. To demo a house and haul the debris to a landfill can run into tens of thousands. There are limits for contents, usually 50% of the building and some policies up to 75%. Most people don't insure valuable contents properly. If you have specific high value items in the home such as art work, jewelry, coins, silverware, collections, etc. etc. you should probably schedule these with a rider. To have all your contents, furniture, clothing, etc, etc, cleaned and put into storage while your home is being rebuilt is expensive and falls under your contents coverage. Additional Living Expenses are usually 20% of the replacement value or it's capped at 12 months. Some higher end policies have no limits on A.L.E. but those are not typical. On a major claim for a total rebuild A.L.E. can easily run out if there are some problems or the value is too low. Unless you have money to spare, spending your own money to live in a rental property and the expenses that go with it, while your home is being rebuilt get ugly real fast. Detached structures such as garages, sheds and pools are usually valued at 10% of the homes replacement value. If you have a detached garage with an apartment above it or an in ground pool with some nice hardscaping around it, 10% can easily be low if the main policy value is low. In short, there are many variable to your insurance policy and you should know what they are, what you need and how much you are buying. I won't say you can never have enough insurance but if you're under insured with a major claim, you and your families lives will be adversely affected for many years to follow.

First of all I want to Thank you all from the bottom of my heart for your advice & compassion. I have been very stressed over all of this and I could feel the genuine concern you have for our situation. Just to fill in a few blanks, we are both now 56 yo. DH has his BA & MBA & a certified Project Manager. He worked AND went to school at same time. I'm afraid I am lacking in the educational department. I have 2 AA degrees in nothing marketable, & got my RE License about a month(2006) before the market started crashing-but left because of my DM deteriorating health at the time. But, actually I was the main caregiver for both of my parents from 2001 until 2007 in our home until they both passed. Dad had cancer & Mom had Alzheimer/dementia. About 2 months after my DM died (Dec '07) I started babysitting(Feb'08) for my 2 granddaughters until just this past November '09, when I started working part-time again. Can't believe I did the formula, diapers, potty-training all over again, but my girls were a good distraction from my grief. My DS & DDIL paid when the could, what they could,--most of the time, not at all, but I just wanted to help them out & make sure the girls were safe with me. It was never about the income, it was all about what was best for my GDD's. Last summer I looked into a local university here & wanted to start school to get a Gerontoloy Certificate ( would take 18 months) & eventually work in Hospice & for seniors. (Heck, I am a senior now too according to Bob Evans--lol) I guess I am just destined to be a caregiver all my life. I started the application process & was told I would probably be eligible for Finacial Aid, but I think working Full Time has to be my priority now. I've been brainstorming to think of any additional means of bringing in some income--like maybe renting out the in-law quarters of our home. Selling off some jewelry--only about $200.00 worth, but every bit has to help. We're down to 1 car which we "juggle". Right now, everything just seems up in the air. We might know more by this week-end, when either my DH's project goes well or comes crashing down & him with it. I am preparing for the crash down, because in the past few weeks, anything that could go wrong, has gone wrong. Like servers going down for hours, connection problems etc. One manager just walked off the job, because he said he couldn't take the pressure anymore. So, Thank you, thank you, thank you, all for taking the time just to let me talk/write about this & for listening. I know there are those here with far worse problems (health etc) & my problems are miniscule compared to theirs, but I thank you again for your suggestions & support. God Bless ~~ katclaws

Lora: Your great views and lot size have nothing to do with the insurance value. Insurance only covers replacement of the home and does not insure the land. Take this a step further, my insurance policy states it does not cover the portion of the home that is under ground. (Do other policies say this also, this policy was with a very large carrier in the USA.). To me, this means the footings, the underground plumbing and electrical, as well as the septic tank, are not covered. In my case, this is approx $25k in building costs (due to expensive foundation). I would have assumed that the 'cost to build' that my insurer calculated would have been much cheaper, given the fact that they are not really insuring the entire home,but instead only insuring the above ground portion of the home. But also in my case the insurance company came in with an estimate of at least $100k OVER our actual cost to build, and our cost also included the foundation, septic system, etc. All I can say is, shop around. Just recently, I switched carriers after having lived in the home awhile and got a new carrier that came up with a cost-to-build approx $50k lower the the first carrier. ---------------------------------- An open question to the insurance pros on this forum....what is the deal with max amt of deductible allowed for most mortgage companies? One of the insurance agents said mortgagers require no more than a 500 deductible. He squawked when I tried to raise it. I ended up switching carriers and got a 1000 deductible. But was wondering about increasing it more . (Am afraid to contact lender to ask in case they say it is 500 and make me lower what I already have.) I read my lender paperwork and it does not give an actual deductible requirement.

No, I would never get it after hearing horror stories of insurance companies not keeping their end of the bargain. They benefit by collecting premiums and then denying care once you become disabled. They sure can afford to wait for something to go to trial while you get sicker and sicker. There have been cases of people disabled by cancer or heartfailure that can't work anymore and STILL can't collect their insurance. Heck, the insurance companies can afford to wait and go to trial while you're sick. That's their ploy. They do not make money by paying out claims. Look at all their fancy buildings and employees! Where does that money come from? I'm fighting with my homeowners insurance right now over hail damage that I had repaired (all according to the rules, no shady business, receipts for everything) and I'm short on my checks by almost $5000; I'm finding how hard it is to fight the insurance companies. Do I want to do it when I'm sick and or disabled? No! Take that premium money and put it in a bank, a bond or under a bed!