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Re: Insurance for homes with bx wiring

You might want to ask them what they don't like about BX. It's still legal if it was installed properly and they may just say "never mind'.

If they persist, type up a "Request For Quote" (RFQ) listing the specifics of your house and send it to every insurance company in your phone book, like I once did. One company was half the price of all the others, guess who we picked!:)

Re: Insurance for homes with bx wiring

Collectively, it seems all the suggestions have been offered. I would just suggest that the home buyer ask his RE agent, credit union, and even the mortgage originator and personal bank for their insurance arms, and then the internet like GEICO, eSurance (I believe owned by Allstate), etc.

On Homeowners insurance, it seems to me that some may fall into the contractor bid trap and pick the cheapest one. Unlike a bad contractor who will ruin your project 80% of the time, a bad insurance insurance company choice will only bite you 1% of the time, because claims occur less than 10% of homes, and only 10% of those claims exceed a threshold of a few $ thousand . . . . but if your house is hit, the wrong coverage will cost you.

So, when you look at premiums, also look at coverage.

(1) While you select the amount of coverage, some insurers require a minimum because most owners know more "coverage" is more premium, so they pick a low amount which is inadequate for a complete loss.
Many or not all insurers then provide a "bump up" that will pay a % more than your coverage to compensate for underestimated construction costs. I've seen 25% to 250% more; if you don't have this, your 1% risk is you can't rebuild - I live (and lived) in high cost areas (Silicon Valley, Wash DC, Manhattan NYC) and no one likes to insure on $250-$350 per sf, but that's what it costs. My 220 ft addition had $8,500 of architectual fees; my friend incurred $20,000+ of architect fees for a 2,000 sf expansion (leave one unrenovated room to get grandfather status).

If you don't have the bump up, then you risk under valuing construction cost.

(2) Increased Cost of Construction -- better buy this or it'll bite you. Even if you have the right coverage amount, the insurer pays on your 1960 house the cost to rebuild to 1960 standard. If you want 2013 building code standard (materials, techniques, etc.), better buy this endorsement for about 10% of the base premium or you won't be able to rebuild without kicking in your money to get to 2013 standards.

(3) You can still choose Actual Cash value (ACV) vs. Replacement Cost (RC). The difference is depreciation - - the water damaged 50" $3,000 plasma TV (purchased 2005) will get you $200 ACV or $700 RC; a burned up $50,000 renovated kitchen (2004) will get you $35,000 ACV or $60,000 RC in 2013. You get what you paid in coverage.

(4) There is minor differences in many policy forms, but collectively they can add up. An important one is "personal property" (your home contents) which is often a % of house structure value - 50% - 75%. Exceptions are jewelry, antiques, money, guns, etc. which is typically capped at $1,000. Jewelry premium is typically 1-2% of value, covering you wherever you travel under a "floater" (that $20,000 engagement ring should cost $30,000 to replace).

If you're a hoarder or grandma / grandpa left you a lot of valuable stuff, and if you lowball rebuilding costs, you also lowball your stuff.

(5) You heard this before, no coverage for FLOOD. Often you get $5,000-$10,000 for water backup and mold, because it's legally easier for the insurer to "cover" for a low amount than to deny the whole claim. The drywall from China purchased by chinzy home builders emitting fumes ?? No coverage.

Again, you can make a lot of mistakes and it won't bite you until you're in the 1% . . .


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