Hello. I was recently approved for a HELOC, but need to obtain home insurance. I would like to get opinions about what companies may offer the most competitive rates. Any input would be appreciated. Thanks.
Cheaper is not always better. Make sure you know exactly what is covered and what is not. Nothing is worse than getting a bargain basement insurance policy that covers virtually nothing.
Here is some information you need to know about insurance:
Actual Cash Value (ACV): Insures the property as it is valued right now. It includes the value of all depreciation. Unless this is new construction, the ACV value will be less than the cost to rebuild.
Replacement Cost Value (RCV): Covers what it would cost to rebuild the home using current construction costs. This is not the market value of the property but what it would cost to build it.
This is what causes sticker shock when buying discounted properties. Your property is listed at 50k but the 85k assessment seems to indicate that you could be looking at a $150k reconstruction costs.
Best Choice? If the home is old and you would not rebuild in the even of a total loss, opt for the ACV policy. If you are looking to cover your investment costs only, opt for the ACV (if the value equals your purchase price). The RCV, however, gives the better protection against loss.
You have to live somewhere. If the home is too old to rebuild, then you would have to purchase something to replace it. You will probably spend as much as you would get from a replacement cost insurance policy to purchase a new home.
I suggest you always get replacement cost coverage unless you have a compelling reason not to.
I’ve seen Guide One and Foremost mentioned in other threads. Are there others from which I should get a quote?
USAA, if you qualify will most normally have the lowest insurance rates on most products.
Ok, great! Farm Bureau had the lowest rate of the ones I have called, by far, including Liberty Mutual, Progressive, and State Farm. Guide one doesn’t offer insurance for primary homes in my state. I will keep USAA in mind.