I'd go online and look for a local insurance broker. That'll save you from calling a zillion individual companies, and the good ones know enough about the companies to handle unusual cases.
And they should be able to advise you on what she's really required to have, esp if she doesn't have a mortgage or other liens on the property.

I'm an insurance agent in another state. Are you in a coastal area? That could be the reason for the huge increase. She can choose to have replacement cost or not. Sometimes, not always, an actual cash value policy is not cheaper than a replacement cost one. I would recommend you call around and get quotes and tell the agent that you are mostly worried about liability and not the house and contents and that you may be okay with an ACV policy.

A replacement cost policy would provide monies to replace what you had. An ACV policy pays out a depreciated amount. For example if there was a hail storm and you needed a new roof an RC policy would give you a new roof. An ACV policy would probably not pay out enough to replace the roof. If the roof was 30 years old, and it cost $10,000 to replace, and RC policy would pay you $10,000 an ACV policy would give you a depreciated amount like $2,000.

This post was edited by louislinus on Thu, Aug 7, 14 at 15:46

louislinus - having just experienced a near total loss fire, From personal experience that the insurance adjuster depreciated almost everything 80-99%. When I talked to my agent about it, he said he didn't know about or deal with any adjuster issues. Your reference to a 30-yr old roof... mine was 13-yrs old and it was depreciated 99%. Trying to rebuild with a RCV policy is difficult enough, I would never tell someone to get an ACV policy. Better to underinsure with a RCV policy - than over-insure with an ACV policy.

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This post was edited by mdln on Thu, Aug 7, 14 at 16:14

Get quotes from companies that will compare several insurance companies, e.g.

InsWeb
Quote Scout
4 Free Quotes
Homeowner Quotes
Home Insurance Center

I saved a substantial amount when using one of these sites. Can't remember which one, though. There may be others.

Topsie, I second the suggestion you call an independent broker. They can do the research for you and offer you options to fit your (mothers) needs.

We have a small business and I've used one for our medical, dental, home and my personal car. Unfortunately this particular broker doesn't offer the type of liability we need for coverage for work and truck, so I went elsewhere for that policy.

This is a smaller community and finding a broker by reputation was simple, I know that isn't true of every where.

mdln - So sorry for your loss. :( And more sorry that your agent wouldn't help you. I certainly get involved in lots of claims for my customers especially one as as sever as yours.

Thanks everyone. No, we are not in a coastal area, nor near a river or any threat. Nobody ever mentioned that there are 2 types of policies. they just say "This is the amount you need." They include the amount that it would take to clear away the entire house and start from scratch. Why can't we under insure if we are willing to take the risk? and why does she HAVE to have car insurance too? The roof is nearly new, and she has already been robbed of all her jewelry! Seems like the fact that it is built like a fort would get her a lower rate, but they say its a high-value house and charge her a fortune. I tried Select Quote online and they ALL said they couldn't help her since she doesn't drive...that's nuts. We will keep looking, but it seems like a big racket!

Wow, twelve grand for homeowners insurance.

Here in Vermont our biggest concern is heavy snow loads on the roof causing damage. I have replacement cost homeowners and I pay under $500 a year for a house valued at $200K.

Heck, my auto insurance is under $800 a year too.

This post was edited by christopherh on Fri, Aug 8, 14 at 6:47

Check out the Alabama Dept of Insurance's information. If you can't get just HO insurance at a reasonable price, I would contact them.
I find 12K incredible. That would be replacement value of 3 mio or thereabouts in my area.

Here is a link that might be useful: Alabama HO insurance

As suggested keep looking, check with the direct writers in your state, and also some brokers who have many markets, some independent brokers have very few markets so they are not able to give you good quotes. Ask each independent who his markets are before spending too much time. . It takes time, but keep looking, learning, shopping to see what is available in your state. You may also find a good policy in the surplus market, it may be a bare bones policy for less money that the surplus market can give you. It is difficult for us to give you detail tips because each state is different.

We've got an old house with plaster walls, and insurance was cheaper if we agreed that in case of replacement, drywall would be ok instead of plaster. That might apply in this case.

I agree $12K is outrageous!

weedy - very interesting point. I had plaster walls before my fire and the ACV amount would not have covered the cost of drywall - so I had to get new plaster walls to get the RCV amount. Was not easy finding a plaster pro, even in the big city/Chgo area.

How is her credit rating? (And, are you in a state that uses credit ratings for insurance risk?)

Also, has she been uninsured and would therefore be considered an insurance risk?

Also if she's had claims, especially a theft claim, I'm sure she's being surcharged for that.

I know from your original post that she doesn't want to move and I totally get that, but how is it possible she can afford to keep this house with the associated upkeep, insurance, taxes, etc. on Social Security?

I don't want to get too far off topic, but is she draining investments or relying on family members to keep her afloat?

If she is physically and financially able to stay in the house indefinitely without family assistance OR if family is helping out without harming their own financial security, possibly you may just need to tough love it a little and tell her that's just what she has to pay to stay put.

Sounds to be like somebody is taking advantage of her age! No, she doesn't need car insurance to get HO insurance.

If she doesn't have a mortgage, she can get liability only.