Brownstone Insurance: figuring replacement value

What formula are most brownstone owners using to figure replacement value? The market value of our home is about $3 m but we can’t afford a premium that comes anywhere near that. Our underwriter is currently using $3-400 per sq ft, or $1.2 m for a 3,200 sq ft house. That would be for new construction with no attempt to replicate the original details. But is that at all realistic? How do others handle this? Thanks.

NeoGrec

in General Discussion 8 years and 2 months ago

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hasibur.rahman07 | 7 years and 9 months ago

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Hi Augustiner, I wanted to get in touch with you regarding a structural engineer. I have been talking to the guy whose name begins with M and I want to ensure not going down a rabbit hole (Apologies to everyone for interrupting this thread but couldn’t figure out how I email you?) Thanks

slopefarm | 8 years and 2 months ago

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The issue is that however much damage there is, the insurance will pay based on the type of coverage you pick. So, for example, if you have fire damage on one floor, and it wil cost $50,000 to restore exactly as it was, the carrier will only pay $50k if you are covered for a like for like restoration. If you take a lesser coverage, they will only pay the cost of the recovery to the level of restoration you are covered for, even though an exact restoration would be within the policy limits.

At the end of the day it is all about risk. Would you rather pay the lower premiums and pocket the difference and take the risk you may want to pay more to repair/restore than the carrier will allow? Or would you rather pay more and be more fully protected? Both are rational choices.

Another issue — have your mechanicals been renovated recently? If you have old electric/plumbing etc, you may want to pay more to make sure you are covered to repair up to current code. You are not automatically covered for that, and it could be expensive. Again, rational choices on both sides.

NeoGrec | 8 years and 2 months ago

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Thanks so much, Augustiner. Any other feedback (brownstone insurance dos and donts) from folks? Our new underwriter will be Zurich. Anyone had experience with them?

Augustiner | 8 years and 2 months ago

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to me that number sounds about right.
I’m in the same ballpark in terms of numbers.
Rather than total destruction it is more likely that your house will be partially destroyed.
If you have sprinklers for example, it’ll just flood and destroy everything but the good news your original fireplaces will still be intact 🙂

I think you’re fine.
It’s more likely that you will cause a car accident and the other guy will sue you and they’ll take away your house because the standard liability cuts off at 50.000 per incident and then they come after your assets. Better up that to 500.000. Will cost only a couple of dollars more.