The replacement cost dilemma

November 2010, updated May 2015, still is an annoyance that happens once a week.

And it really is a dilemma.  I’ve likely written before that I have 20ish options for insuring a home and all 20 have a different idea of what the same home will cost to rebuild.  Scarier than this, is that several use the same backend system that determines the replacement cost.  But, there is nothing particularly “sexy” about this topic so maybe that is why it doesn’t get much attention.

I suppose this is what happens when no one is quite sure of the answer.  It has elements of collusion since home insurance may be the most underpriced line of insurance.  And, “odd” as it may be, if you compared replacement costs from ALL carriers, they would be likely significantly higher than new cost construction.  You’d also see that, with many companies, you actually get a credit for letting them increase your coverage but this credit doesn’t offset the rate increase, it just masks it?

Going to reframe this a bit…..