I have lived in the same house for 11 years and I've used the same insurance company for homeowners' coverage the entire time....Amica.

Over that 11 year period, the coverage amounts for the dwelling, loss of use, personal property, and other structures have all increased equally - 3.76% per year. My premium cost has increased 6.71%. The premium growth includes a reduction from changing my deductible (in 2012).

The dwelling coverage is now significantly more than the market value of the home...$150,000 more. And the market value of the home includes the land. If my house burned down tomorrow, I wouldn't have to buy the land all over again...I'd only have to replace the house itself.

Does this seem reasonable or typical? Can I challenge the valuations? Are my only real options to reduce my premium costs to (a) quote another insurance company or (b) raise my deductible?

I assumed the contents of the house were considered personal property, and that coverage is broken out separately from the dwelling. It's a different line item in the policy.

I got a quote from a few different companies a couple of years ago and Amica was still the best. I have my auto and umbrella with them, too. Nevertheless, I'm shocked at my homeowners premium. When we moved in, it was $800 a year. Now it's over $1500.

The biggest reason seems to be that ever increasing dwelling coverage. I get that it needs to reset....but it's more than the house and land combined. Even if you assume a high $200/sq ft rebuild cost, it's way too high. Or at least I think it is, unless I'm missing something, which is why I posted.

BreakPoint said:

---

I assumed the contents of the house were considered personal property, and that coverage is broken out separately from the dwelling. It's a different line item in the policy.

I got a quote from a few different companies a couple of years ago and Amica was still the best. I have my auto and umbrella with them, too. Nevertheless, I'm shocked at my homeowners premium. When we moved in, it was $800 a year. Now it's over $1500.

The biggest reason seems to be that ever increasing dwelling coverage. I get that it needs to reset....but it's more than the house and land combined. Even if you assume a high $200/sq ft rebuild cost, it's way too high. Or at least I think it is, unless I'm missing something, which is why I posted.

---

Not sure where you're located, but good luck getting a new house built for $200/sq ft right now.

Selling prices in this area are less than $150/sq ft...and that includes the land. If building costs are that high, how can new construction compete?

Everpack said:

---

BreakPoint said:

---

I assumed the contents of the house were considered personal property, and that coverage is broken out separately from the dwelling. It's a different line item in the policy.

I got a quote from a few different companies a couple of years ago and Amica was still the best. I have my auto and umbrella with them, too. Nevertheless, I'm shocked at my homeowners premium. When we moved in, it was $800 a year. Now it's over $1500.

The biggest reason seems to be that ever increasing dwelling coverage. I get that it needs to reset....but it's more than the house and land combined. Even if you assume a high $200/sq ft rebuild cost, it's way too high. Or at least I think it is, unless I'm missing something, which is why I posted.

---

Not sure where you're located, but good luck getting a new house built for $200/sq ft right now.

---

Obviously depends on size, amenities, and location and whether you're buying a pre-sale being built on the builder's lot or hiring a contract builder to build on your own land.

In Raleigh our raw sticks, bricks, and overhead costs (excluding land) are currently in the $140s PSF on our (relatively custom) specs.

Fee builders would add margin to that number but even with currently crazy lumber prices you could definitely get a nice-but-not-lavish house built for well under $200/SF in more rural markets.

BreakPoint said:

---

Selling prices in this area are less than $150/sq ft...and that includes the land. If building costs are that high, how can new construction compete?

---

There's a bigger disconnect than normal right now given what lumber prices are between resale pricing and new construction pricing.

Also, new construction doesn't typically directly compete with the resale market; often times new construction buyers are only in the market for new construction. People are typically willing to pay more PSF for new construction than resales of roughly similar quality but that disparity has long been baked into the market; the big difference right now is lumber prices being so high relative to historical norms.

What makes this current construction market so strange is that lumber prices have driven up the cost of an average 2000 SF new construction home $25,000 over what it was a year ago. The market has absorbed a fraction of that cost increase but builders are eating a portion of the overage also. In our estimation we have been able to recover 15k-20k of the cost increase on each home via increased sale prices but our margins have taken a hit for the balance.

Nevertheless, your gut instinct that you can build a home for well under what's being shown as replacement value on your policy is very likely correct if that replacement cost is over $200 PSF. I would simply inquire with your insurer regarding the disparity between actual replacement cost and the inflated replacement call shown on the policy.

Everpack said:

---

BreakPoint said:

---

I assumed the contents of the house were considered personal property, and that coverage is broken out separately from the dwelling. It's a different line item in the policy.

I got a quote from a few different companies a couple of years ago and Amica was still the best. I have my auto and umbrella with them, too. Nevertheless, I'm shocked at my homeowners premium. When we moved in, it was $800 a year. Now it's over $1500.

The biggest reason seems to be that ever increasing dwelling coverage. I get that it needs to reset....but it's more than the house and land combined. Even if you assume a high $200/sq ft rebuild cost, it's way too high. Or at least I think it is, unless I'm missing something, which is why I posted.

---

Not sure where you're located, but good luck getting a new house built for $200/sq ft right now.

---

I have a buddy down here on the coast wanting to build on a creekfront lot that leads to the ICWW that he already owns... and he's getting quoted $170-$180 PSF like clockwork.

TheStorm said:

---

Everpack said:

---

BreakPoint said:

---

I assumed the contents of the house were considered personal property, and that coverage is broken out separately from the dwelling. It's a different line item in the policy.

I got a quote from a few different companies a couple of years ago and Amica was still the best. I have my auto and umbrella with them, too. Nevertheless, I'm shocked at my homeowners premium. When we moved in, it was $800 a year. Now it's over $1500.

The biggest reason seems to be that ever increasing dwelling coverage. I get that it needs to reset....but it's more than the house and land combined. Even if you assume a high $200/sq ft rebuild cost, it's way too high. Or at least I think it is, unless I'm missing something, which is why I posted.

---

Not sure where you're located, but good luck getting a new house built for $200/sq ft right now.

---

I have a buddy down here on the coast wanting to build on a creekfront lot that leads to the ICWW that he already owns... and he's getting quoted $170-$180 PSF like clockwork.

---

How big?

How nice?

Are sales prices for resale creek front houses that lead to the ICWW $150/SF like they are for the OP?

I've become so used to the ridiculous real estate market here outside of Asheville that I forget not everywhere is completely insane. 50-60 year old homes that haven't been touched are selling for $200/ sq ft up here as fast as they're listed. It's driven the new construction market to an unattainable level.

Touch base with me. If he is still looking, I think I can find him a better price for that, especially if he is looking for a custom home build.

RunsWithWolves26 said:

---

Touch base with me. If he is still looking, I think I can find him a better price for that, especially if he is looking for a custom home build.

---

Definitely. We just had this conversation last week and he said it was crazy and he wasn't going to pay that... then I have another friend here building a custom house on the island and he has a GC that is mostly building in the Lake Gaston market doing it for him at cost plus 20%.

TheStorm said:

---

RunsWithWolves26 said:

---

Touch base with me. If he is still looking, I think I can find him a better price for that, especially if he is looking for a custom home build.

---

Definitely. We just had this conversation last week and he said it was crazy and he wasn't going to pay that... then I have another friend here building a custom house on the island and he has a GC that is mostly building in the Lake Gaston market doing it for him at cost plus 20%.

---

Hey Runs! I sent you a IM earlier this week on this... let me know!