Our home insurance bill just arrived. I think they've over-valued the replacement cost for our house. I'm also reminded that I really don't know what protection I'm buying here.
One nearby home is my only comparison. It's new construction and sold in February. It is twice as large as our house but the lot is only slightly larger than ours. It sold for "X" -- including of course its foundation and lot.
Could I assume that our house should be insured for about half of "X"? (Our 10-year-old house and our lot are assessed nearly equally.)
It's unlikely our house would be totally destroyed by fire or whatever. How is *partial* damage assessed by the insurance company? Surely it would cost more to rebuild the kitchen than a bedroom -- or would settlement somehow relate back to the valuation on which we'd insured the entire house?
The company must realize these premiums are high -- or that times are hard. They are promoting a plan to lower the premiums if the homeowner assumes a one or two percent risk. It seems to me I'd be ahead to have 100% coverage, but on a lower amount.