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homestead - Re: [Homestead] Insurance coverage is not what you think is, or tax deductions either.

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  • From: Don Bowen <don.bowen AT earthlink.net>
  • To: homestead AT lists.ibiblio.org
  • Subject: Re: [Homestead] Insurance coverage is not what you think is, or tax deductions either.
  • Date: Mon, 30 Aug 2004 08:32:39 -0700

At 8/29/2004, you wrote:
We just bought insurance for the new house. We have a $250 deductible. The
value of the house was determined by a $$ amt./sq. ft for replacement value.
That total is more than it would cost to replace this house.

Now, this is different that the policy we had on the old house which stated
they would replace the house, same sq. ft.

are policies written differently in different parts of the country?

After last falls fires we are getting almost weekly articles in the paper about how most people are under covered. The reasons are many and varied but the most common are people not wanting to pay for decent coverage, listening to agents, expecting too much, building additions and not changing the coverage, not reviewing the policy occasionally. Many high end tract built homes have trouble rebuilding because the huge cost differential between tract and custom homes with the same materials. Also some people think the tract home frame is built like a custom home when it was built just like any other tract built, cheap or expensive.

Another problem was the change in terms. What used to be complete replacement has changed to complete replacement up to a limit. Other terms changed slightly, all in all leaving some people with inadequate coverage.

I reviewed ours again after the fire and figured that if I did the contracting myself I could build the same thing or slightly better within the money allowed in the policy. If I had to hire a contractor then we would build the same thing but it would require careful management. As for the interior, we would be able to replace everything, mostly because we do not have anything fancy and most of it is old. Now my shop is an entirely different matter. There is no way I could replace that within the limits of the policy. If we were to stay here I would have to put a rider on the policy.

I have gotten some fire related business. My favorite was an oval frame for a stained glass window set into a door. When first asked I bid high enough that I hoped they would not take it. It shocked me when they took it and in the end I made no money on the project. It was a 1 inch thick oval frame of Mahogany with a round over on the outside edge and a reverse ogee on the inside. The oval was about 3 ft tall and 18 in wide. I did not make any money because of the tooling and learning curve but I did not lose any and it was a fun project. I have since built a round frame and will build some trim with the same tooling.

Don Bowen
Awl Knotted Up Woodworking
Valley Center, CA http://www.braingarage.com






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