My mom owns the two-family home in Brooklyn, NY where she lives. My dad recently died [very, very sad face here] and I’ve been helping her write up the paperwork to settle his estate.
I’ve discovered that my beloved father – the frugal, stubborn old guy that he was – seems to have woefully underinsured the house. The prospect of my mom’s home burning to the ground and not getting enough money to rebuild the thing terrifies me. So, I’ve convinced her to upgrade the insurance to today’s standards.
Dad was a loyal Allstate man his whole life, so mom and I went there to explain the situation. The nice woman asked us a bunch of faily simple questions, typed the answers into her computer, and out came a policy quote.
Now, I’ve had almost zero experience with insurance shopping, so I’m looking for a little advice from the more experienced hands on the board.
How trustworthy is the nice agent? Is buying insurance essentially like buying a bottle of Tide at any Kmart? That is, will any Allstate agent quote me the exact same price based on the same input information? Or is there some negotiating to be done?
When she says that it will cost my mom no more than $200,000 to rebuild, can I believe her? Likewise, regarding the $500,000 liability coverage she says is the maximum they allow. Both figures seem low to me.
Is it worth the trouble to shop around to other brands? Or do they all generally use the same formulas to figure the coverage?
Got any other advice for a novice like me?
A couple of facts about mom’s situation that might help refine your answers. The house is about 90 yrs old. It’s attached and made of brick. There’s no garage. It has an unfinished basement. It’s in a very, very safe and stable neighborhood. In the forty years my folks have had the house I don’t think they’ve ever put in a claim. (So, assuming the same routine, I’m leaning toward taking a high deductable and lower premiums).
I am not an insurance agent, just a homeowner. Hopefully, someone who is really knowledgeable about insurance will post soon. That being said, here’s my .02
You will get different quotes from different agents. Check to see what the other houses in the neighborhood have sold at or the appraisal amount. Use that price as your replacement amount. High deductibles are good as they equal lower premiums, but again, check on the company’s service record. Do they hassle you if you do have a claim? How long does it take to pay etc…Ask for discounts. Do they have senior citizen discounts? discounts for members of AARP, discounts for those who also carry their car insurance with the company etc…
And then, there are numerous web sites that give free quotes, plug in your criteria to a few of those and see how it falls.
Sorry to hear about your Dad.
Also just a homeowner but here’s a few things you should know-
If you go with a “guaranteed replacement cost” policy ,the cost of rebuilding will be covered as long as the house isn’t underinsured, even if it turns out to be more than the company expected.
$500,000 is not low for liability. I think I have less. What I also have is an umbrella policy that “goes over” both my homeowners and auto liability up to a million dollars.Costs a couple of hundred dollars a year.
And remember, since you live in NY, a good part of a homes price is for the value of the land- a house that you can sell for 200,000 will cost less than that to rebuild.
As far as I know, any Allstate agent will quote the same price for the same policy. However, different companies will have different prices,and each company most likely has a couple of different pollicies.
Wow… I can actually contribute something here. (I hope!)
I work for an insurance company but don’t deal much with Homeowner’s policies… I mostly deal with auto… but I may be able to answer a few questions.
First of all… don’t ever completely trust your agent. Working for an insurance company and talking to many agents I can tell you that most of them are looking to make a commission. I’m not saying they’re going to rip you off but they need to make a living too and any time they can get more premium out of an insured, the bigger their paycheck is going to be. Most of the agents I deal with genuinely do care about the people they are insuring and will really go the extra mile for them but there are some out there who are just looking to make money and don’t care if they hurt you or not. Go ahead and shop around with other companies. It costs you nothing to get a quote and compare coverages.
As for deductibles, I would go with a $1,000 deductible. That’s just my preference. Think of it this way. If you have a $500 deductible and you have a $700 claim, are you really going to turn in that claim? You would have to pay $500 and the insurance company would only have to pay $200. It’s just really not worth it to pay more premium for a $500 deductible.
I have to go to a meeting but please feel free to e-mail me if you’d like… I can probably give you some more information!
