Re: Thoughts on house prices and income

On Wed, 19 Sep 2007 13:36:21 -0700, mg <mgkelson@xxxxxxxxx> wrote:

On Sep 18, 3:54 pm, Thumper <jaylsm...@xxxxxxxxxxx> wrote:
On Tue, 18 Sep 2007 13:40:48 -0700, mg <mgkel...@xxxxxxxxx> wrote:
On Sep 17, 4:41 pm, Alan Lichtenstein <a...@xxxxxxxxxx> wrote:
mg wrote:

( previous post snipped-follow thread )

This is off topic, but a few years ago, it occurred to me (duh) that I
didn't need to insure my lot or my cement work or the utility
connections or the sprinkling system, etc., since they're not going to
burn up in a fire.

So, I got the local square-foot building cost for my area and then I
found a place on the internet that had a contractors work *** and I
calculated the cost to completely rebuild my home and then insured it
for that much.

The problem now, of course, is that I now need to do it again. Either
that or just insure it for total sales value, which I don't think is
necessary.

You're quite correct, however, there are other risks that these are
subject to, which you may want to insure against. Unless you
specifically exclude them, they'll be included in the estimate of your
total value. You'll probably find that they really don't cost that much
to make it cost effective to exclude them.

As far as construction costs, on the surface it seems like a good idea
to use those as a guide, however, unless materials are specified, that
could be dangerous and result in underinsuring. Since you selected that
model, it might be prudent to get specifics as to what materials those
square foot estimates pertain to. And internet square foot estimates
will not necessarily be compatible with the building codes in your
locality. You should check to see which code those figures you got off
the net pertain to. Codes differ from taxing entity to taxing entity,
and a general figure for your 'locality' might not be particular to your
codes. You might also do well to then check the materials per code to
the materials you might want, and see if your policy permits you an
option, or if it specifies least expensive materials per code. If it
doesn't, then you might do better to insure the house for the full
retail value( less the land ), as if you have a loss, the larger amount
would permit rebuilding with state-of-the-art materials.

This is something I've been procrastinating on that's been on the
bottom of my to do list. If I can figure out what my lot is worth and
subtract it out of estimated sales value that might be the way to go,
I guess.

This can be tricky if you have an older house. It may cost almost
twice as much as an older house to rebuild completely in new
materials. My insurance company sits down with me and figures out
replacement costs at prevailing rates by going over exactly what type
of siding it is etc. My house would cost as much to rebuild on my lot
as both the existing house and lot are valuated at now.
Thumper

It makes you wonder how it would work out money wise, If you simply
cleaned the property up after a fire completely destroyed your house
and then sold the lot with the existing cement work and utility
connections and combined it with your insurance money and bought a new
one.

The reality, I suppose, is that fires rarely destroy the entire house,
however.


My tax bill breaks out the cost of the lot. I like the location so I
would rather build it from the foundation up, I believe.
Thumper
.