Home Insurance Tulsa | more about market value v replacement cost

All right. Uh, this fee. Sure. You, Oklahoma, all original content podcast number one, 59, one five, nine. Um, Home Insurance Tulsa, today we’re talking about home values, replacement costs versus market value versus loan amounts. Um, this is a gets, oh, I’m sorry. Today’s podcast is brought to you by the fine people at amtrust and press insurance is who we trust with all of our small commercial needs, bops and one fourth, but definitely with workers’ compensation policies. We write with amtrust, uh, out of Arkansas. Great Company, great service, great products at great prices. Anyway, back to our all original content. And we’re talking about home values versus replacement costs versus the loan amount. So we recently had her whole, let me give you a little backstory. We work with quite a few mortgage brokers in town because mortgage brokers like the flexibility that an independent agency has to quote with different companies, uh, and build different policies based on what they need to get a loan closed.

So if you are a mortgage broker listening to this podcast, give us a call at the ensure you have home offices at (918) 322-7100 (405) 322-5501 now back to the home insurance Tolson topic of how’s value market value, replacement costs, and um, loan amount. So we insure homes for replacement cost. And the reason we do that is because you want to have the house replaces, there’s a total loss and not just get some money for it. So let me give you an example. A omen insurance. Tulsa home could be 11 or 1200 square feet, one car garage, three bedrooms, one bathroom. And the value of that could be $90,000 and you’re going to buy it because it makes a good rental property. And I get nice for you get $900,000 a month, that 900 problem with, and then the insurance agent comes back and says, okay, your premium is $1,300 because we’re insuring the house for $133,000 and you said, wait a minute.

I only paid $90,000 for the house for $85,000 as well. It doesn’t matter what you paid for it, it matters what it cost to replace it. So yes, you may be insuring it for more than what you paid for, but come claim time, you’re going to want to replace and not just get a check for $19,000 or we can write it for $90,000 and that’s what you get burns down or something happens, you get 90,000 the other problem comes to at claim time, you have a partial loss of $50,000 loss. You’re not going to get $50,000, you aren’t going to get to percentage of coverage between one shirt and replacement costs. So, Home Insurance Tulsa, you’ll get maybe 40,000 for it and you’re successful. But anyway, it’s an investment property and dollars in dollars out if return on investments. So all that needs to be taken into consideration. Okay, now let’s talk about loan value.

You were buying a house on 40 acres with a horse arena and a nice horse part. You’re paying a half a million dollars for it. And you’re putting down 20% to the loan amount is $400,000 well, the House on there is 2100 square feet. It’s a little dated. It’s nice, but you know, it’s just been builders. Great Hope. And a builder’s grade would be anything you can buy at Lowe’s is builder’s grade. Custom would be anything that’s being made for you or a higher end store. So anyway, you are, you have a builder’s grade home, a 2100 square feet, you’re borrowing $400,000 replacement cost on the 2100 square foot house is $250,000 and you wanted a trip for $250,000 because that’s what it takes to replace it. But no, the insurance company says an FC insured for $400,000 because that’s the amount of the loan. Can you just say, wait a minute. Well first you say, well, I’ll do that. And then if it burns down, I’ll just fill on the partner thousand dollar house. That’s not how it works. What happens is they replace your house and it probably cost him $250,000. So you are now paying

okay

for insurance for $400,000 on a $250,000 house because the mortgage company requires that you have that amount of insurance because that came out of the lone duck insurance agent’s fault. You know, you just need home insurance, salsa and the insurance things is getting what they need, what you need, not what you need. But with an orange company says you have to have, well you want to close on the mortgage or not. So what you need to do is talk to the mortgage company because they are the ones who are, Home Insurance Tulsa, I mean they’re just not even think.

So that’s the difference between replacement cost and market value or a place of constant. We quite a bit more than market value or market value can be quite a bit less than the taste of cost and loan value can be quite a bit more than replacement costs. So now you’re actually, you’re not even, you’re insurance something for more than it costs to replace it. And this case $150,000 more, which could affect the premium by five, 600 bucks. So you’re paying that much more an insurance every year to get, um, just to get the loan. And that’s not the insurance agent’s fault. Like who said he’d take care of home insurance, Tulsa mortgage brokers and mortgage companies take care of the rest. Yes, it’s shortsighted. Can you change it after the closing? I don’t know. I don’t know what the mortgage company would say, but I think the best argument in this scenario, and remember we’ve said it has indoor horse arena and a couple of big barns is to make sure that all these structures, the barns and the home add up to the $400,000 or more cause then that’s actually protecting the mortgage company from what they need.

And that one day short sightedly say they want, Home Insurance Tulsa, so that would be the ideal home insurance tall, some policy that it would be everything for replacement costs, including the barns. Now the barns have concrete floors those prior according to where you can just go to the barn back up over it. But those are some of the things we run into on a daily basis with, Home Insurance Tulsa, when we’re taking care of people’s Home Insurance Salsa and ensure you Oklahoma. So it’s not our fault. Don’t yell at me. I mean, any insurance agent you go to, anyone that writes home insurance call center is going to have the same problem because it’s not the insurance agent’s fault. It’s the mortgage companies and mortgage companies are the ones being shortsighted. So now you know that it was between market value. We don’t insure for market value because it’s an arbitrary costs. Um, we don’t, we insure for replacement costs, but sometimes your insurance or your mortgage company forces you to have more insurance than replacement costs because they think the market value’s higher on that particular home. It’s not, it’s higher on the total value of the property and that goes along with the 60 acres and everything. Um,

so

right. There’s the difference between loan value, replacement costs and market value. All the insurance company cares about is replacement cost. If you or your mortgage company wants to insure for double replacement cost, find the insurance company is fine. Taking your money, knowing that we’ll never pay out that much. It’s a scam and it’s a scam. This being perpetrated by the mortgage companies. If we did that with all policies, our loss ratios would be fantastic because all of our premiums would be 20% higher, artificially higher. So anyway, for the best care anywhere, call home and call the guys and ensure you Oklahoma. We’ve just expanded and we have, Micah has joined us, Michael, Mike, we loo. I’ll give him a call at (918) 322-7100 or visit us and ensure you won’t call him a.com.