Are you saying that we should do away with flood insurance all together?
You were the one that said that the purpose of insurance was NOT to put you back to 100%. What do you think insurance is for then? Why in the world would anyone have insurance if not to put them back to where they were?
If co-insurance was all about collecting premium dollars, why then don\’t the insurance companies let you purchase any old amount and charge for it and do away with co-insurance? Because the average American would not be able to afford to repair or replace their property and the neighborhoods would look like hell. Take a look at Port Charlotte Fl where 2 years later they still have not finished rebuilding and some neighborhoods look like hell and the property values have declined. I am sure you would not like to live next door to a house that is not put back together and your property values decline because of it.
DH: What in the world are you talking about. There is no co-insurance clause in a HO policy. There is no choice on a HO policy as to the % used in the replacement cost calcualtion. It is always 80%. If you are an underwriter, please explain what the premium must be to insure a risk with a 100% probability of los by a covered peril!!!!
Linda:
I repeat, there is no mention of CO-INSURANCE anywher in a HO policy. Insurance and the theory behind it are not to put you back 100%, but to asist in a catastrophe. Does this mean that the consuming public and agency staff like you don\’t know any better? Apparently so. Insurance is an elementary concept, yet so many fail to grasp it.
just a few basic principles that we all should be able to agree upon.
1. Insurance is based upon statistical data.
2. Insurance is designed to \”spread\” or disburse the risk over a geographic area as well as over social and economic areas.
Now let us examine flood insurance.
1. Flood insurance is written in an area where flood is iminent, therefore by design and practivcal application, it meets neither of the criteria noted above with insurance, therefore, it is not in a true sense insurance, but governemt welfare. Now, why is it wrong to oppose the escalation of government welfare programs.
I suggest you take out a HO policy and read Section 1 – Conditions, Item 3 Loss Setttlement – Covered property losses are settled as follows: item B: Buildings under coverage A or B at replacement cost without deduction for depreciation, subject to the following: 1) If, at time of loss, the amount of insurance in this policy on the damaged building is 80% or more of the full replacement cost of the building immediately before the loss, we will pay the cost to repair or replace, after application of deductible, and without the deduction for depreciation, but not more than the least of the following amounts: a) The limit of liability under this policy that applies to the building; b) the replacement cost of that part of the building damaged for like construction and use on the same premises or c) the necessary amount actually spent to repair or replace the damaged building.
2) If, at any time of loss, the amount of insurance in this policy on the damaged building in this policy is less than 80% of the full replacement cost of the building immediately before the loss, we will pay the greater of the following amounts, but not more than the limit of liability under this policy that applies to the building: a) the actual cash value of that part of the building damaged; or b)that portion of the cost to repair or replace, after application of deductible and without deduction of depreciation, that part of the building damaged, which is the total amount of insurance in this policy on the damaged building BEARS TO 80% OF THE REPLACEMENT COST OF THE BUILDING.
That Mr. Adjuster just stated that co-insurance does apply to a HO policy.
I wonder just what you think a policy should pay out in say a fire loss where a house burns down. Should the company only pay 25% or 50% or 75% of the loss?
You really should rethink another career because you certainly do not know anyting about insurance.
Please read your HO policy and QUOTE TOI ME VERBATEM where CO-IINSURANCE is mentioned. It does not exist. You answer questions from insurance 101 with the wrong answer. Premium is based upon the REPLACEMENT COST CLAUSE, not co-insurance, and it is designed to get more premium from the insured\’s pocket to the insuror\’s bank account. It is designed to ensure that adequate premium is collected. Only in your scenario where insured\’s could buy whatever they wanted in coverage would the carrier not get enough premium. Another simple question. How many times has the cost calculator the agent used to value to dwelling over value the dwelling? This is a premium increase without going before the commissioner. And in a non-valued policy state, there is no increased risk for the carrier. We need to educate our industry so we don\’t get such a bad reputation
Please explain the difference between CO-INSURANCE and the REPLACEMENT COST CLAUSE found in an HO policy. And yes, you can go ans ask your supervising agent as obviously you are clerical only.
Our agency does not use cost calculators because they are not accurate. We use appraisals from licensed real estate appraisers.
Your comments about premium collections just does not make sense.
Okay, the HO policy does not use the verbage Co-insurance but if that is not the entent then why even bring up the 80% to replacement cost? The intent of co-insurance is to be a penalty for not carrying the proper amount of insurance and I consider being paid actual cash value vs replacement cost a penalty.
Linda:
Citizens does not require an appraisal for a personal wind-only policy.
I too object to NFIP using my tax dollars to pay for people who rebuild in flood-prone areas. In my area of Florida, a homeowner just rebuilt, for the 4th time, the same home in the same spot, after it was flooded by its 5th hurricane. Yes, he had that many flood claims.
You show your lack of knowledge. However, you finally have now learned there is no CO-INSURANCE in a HO policy. Just relax and think. If you can buy whatever amount you want without regard to value, you could buy $50,000 on a $200,000 dwelling. This would result in a loss of premium of over 50% top the carrier. As over 90% of all losses are partial, not total, you would be getting the benefit of insurance without payimg premium for it.
Now to address the CO-0INSURANCE VS REPLACEMENT COST CLAUSE. Co-insurance penalizes the insured much more severely than the RC clause. In the event of underinusrance on a CO-INSURANCE contract, the insured sustains BOTH depreciation and a penalty based upon the underinsured percentage. Such as if $80,000 was required, and $60,000 is the policy amount, the insured would first sustain depreciation and then would have an additional 25% deducted. In a replacement cost clause loss with the same figures, the insured would sustain a loss of actual depreciation or the penalty of 25%, whichever is LESS!!!!
Finally, how can you afford to pay for a $300 real estate appraisal on every policy. And an appraisal does not calculate RC, it calculates market value. These are two entirely different values.
No, Linda, you should learn about the insurance industry before you make such statemnt to show your lack of knowlege and understanding.
We have updated our privacy policy to be more clear and meet the new requirements of the GDPR. By continuing to use our site, you accept our revised Privacy Policy.
Are you saying that we should do away with flood insurance all together?
You were the one that said that the purpose of insurance was NOT to put you back to 100%. What do you think insurance is for then? Why in the world would anyone have insurance if not to put them back to where they were?
If co-insurance was all about collecting premium dollars, why then don\’t the insurance companies let you purchase any old amount and charge for it and do away with co-insurance? Because the average American would not be able to afford to repair or replace their property and the neighborhoods would look like hell. Take a look at Port Charlotte Fl where 2 years later they still have not finished rebuilding and some neighborhoods look like hell and the property values have declined. I am sure you would not like to live next door to a house that is not put back together and your property values decline because of it.
BTW, my CE credits are up to date.
DH: What in the world are you talking about. There is no co-insurance clause in a HO policy. There is no choice on a HO policy as to the % used in the replacement cost calcualtion. It is always 80%. If you are an underwriter, please explain what the premium must be to insure a risk with a 100% probability of los by a covered peril!!!!
Linda:
I repeat, there is no mention of CO-INSURANCE anywher in a HO policy. Insurance and the theory behind it are not to put you back 100%, but to asist in a catastrophe. Does this mean that the consuming public and agency staff like you don\’t know any better? Apparently so. Insurance is an elementary concept, yet so many fail to grasp it.
just a few basic principles that we all should be able to agree upon.
1. Insurance is based upon statistical data.
2. Insurance is designed to \”spread\” or disburse the risk over a geographic area as well as over social and economic areas.
Now let us examine flood insurance.
1. Flood insurance is written in an area where flood is iminent, therefore by design and practivcal application, it meets neither of the criteria noted above with insurance, therefore, it is not in a true sense insurance, but governemt welfare. Now, why is it wrong to oppose the escalation of government welfare programs.
I agree with ML, you are very scary.
I suggest you take out a HO policy and read Section 1 – Conditions, Item 3 Loss Setttlement – Covered property losses are settled as follows: item B: Buildings under coverage A or B at replacement cost without deduction for depreciation, subject to the following: 1) If, at time of loss, the amount of insurance in this policy on the damaged building is 80% or more of the full replacement cost of the building immediately before the loss, we will pay the cost to repair or replace, after application of deductible, and without the deduction for depreciation, but not more than the least of the following amounts: a) The limit of liability under this policy that applies to the building; b) the replacement cost of that part of the building damaged for like construction and use on the same premises or c) the necessary amount actually spent to repair or replace the damaged building.
2) If, at any time of loss, the amount of insurance in this policy on the damaged building in this policy is less than 80% of the full replacement cost of the building immediately before the loss, we will pay the greater of the following amounts, but not more than the limit of liability under this policy that applies to the building: a) the actual cash value of that part of the building damaged; or b)that portion of the cost to repair or replace, after application of deductible and without deduction of depreciation, that part of the building damaged, which is the total amount of insurance in this policy on the damaged building BEARS TO 80% OF THE REPLACEMENT COST OF THE BUILDING.
That Mr. Adjuster just stated that co-insurance does apply to a HO policy.
I wonder just what you think a policy should pay out in say a fire loss where a house burns down. Should the company only pay 25% or 50% or 75% of the loss?
You really should rethink another career because you certainly do not know anyting about insurance.
Linda:
Please read your HO policy and QUOTE TOI ME VERBATEM where CO-IINSURANCE is mentioned. It does not exist. You answer questions from insurance 101 with the wrong answer. Premium is based upon the REPLACEMENT COST CLAUSE, not co-insurance, and it is designed to get more premium from the insured\’s pocket to the insuror\’s bank account. It is designed to ensure that adequate premium is collected. Only in your scenario where insured\’s could buy whatever they wanted in coverage would the carrier not get enough premium. Another simple question. How many times has the cost calculator the agent used to value to dwelling over value the dwelling? This is a premium increase without going before the commissioner. And in a non-valued policy state, there is no increased risk for the carrier. We need to educate our industry so we don\’t get such a bad reputation
Linda:
Please explain the difference between CO-INSURANCE and the REPLACEMENT COST CLAUSE found in an HO policy. And yes, you can go ans ask your supervising agent as obviously you are clerical only.
Our agency does not use cost calculators because they are not accurate. We use appraisals from licensed real estate appraisers.
Your comments about premium collections just does not make sense.
Okay, the HO policy does not use the verbage Co-insurance but if that is not the entent then why even bring up the 80% to replacement cost? The intent of co-insurance is to be a penalty for not carrying the proper amount of insurance and I consider being paid actual cash value vs replacement cost a penalty.
Linda:
Citizens does not require an appraisal for a personal wind-only policy.
I too object to NFIP using my tax dollars to pay for people who rebuild in flood-prone areas. In my area of Florida, a homeowner just rebuilt, for the 4th time, the same home in the same spot, after it was flooded by its 5th hurricane. Yes, he had that many flood claims.
Linda:
You show your lack of knowledge. However, you finally have now learned there is no CO-INSURANCE in a HO policy. Just relax and think. If you can buy whatever amount you want without regard to value, you could buy $50,000 on a $200,000 dwelling. This would result in a loss of premium of over 50% top the carrier. As over 90% of all losses are partial, not total, you would be getting the benefit of insurance without payimg premium for it.
Now to address the CO-0INSURANCE VS REPLACEMENT COST CLAUSE. Co-insurance penalizes the insured much more severely than the RC clause. In the event of underinusrance on a CO-INSURANCE contract, the insured sustains BOTH depreciation and a penalty based upon the underinsured percentage. Such as if $80,000 was required, and $60,000 is the policy amount, the insured would first sustain depreciation and then would have an additional 25% deducted. In a replacement cost clause loss with the same figures, the insured would sustain a loss of actual depreciation or the penalty of 25%, whichever is LESS!!!!
Finally, how can you afford to pay for a $300 real estate appraisal on every policy. And an appraisal does not calculate RC, it calculates market value. These are two entirely different values.
No, Linda, you should learn about the insurance industry before you make such statemnt to show your lack of knowlege and understanding.