Isn\’t this the job of the retail agent to determine how much insurance their client needs in the event of a total loss? Then if the insured doesn\’t agree because they want to trim down the amount of premium…have them sign off on it and/or they get penalized with co-insurance penalties. Insureds have very short memories when it comes to having discussions with their agents regarding this issue.
I agree an \”honest\” retail agent will try and provide the best guess at replacement cost at the time of original purchase. Here in CA, building costs have soared over the last 7-10 years, and even with inflation guards increasing coverages every year, we find that many homes are underinsured still. When we go back to the insureds now, we advise them what we believe it should be and also advise them to seek out a contractor for his estimate and if they do not agree to the increase, we have them sign off on a disclosure form. We are relentless in the ones that do not answer. We will send the same letter every month for 6 straight months. Unfortunately, most of the clients don\’t want to spend any more money on insurance so they take a chance. It\’s amazing how someone can drive around in a 60k vehicle but not want to pay another $100 or so more to cover $100-300k in equity in their own home. As for the Farmers and State Farm and Allstate agents that undercut the replacement cost, I hope it comes back to bite you in the butt someday.
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.
There are a lot of small insurance companies in Texas that don\’t automatically adjust the coverage amount at renewal like the larger companies do.
Isn\’t this the job of the retail agent to determine how much insurance their client needs in the event of a total loss? Then if the insured doesn\’t agree because they want to trim down the amount of premium…have them sign off on it and/or they get penalized with co-insurance penalties. Insureds have very short memories when it comes to having discussions with their agents regarding this issue.
I agree an \”honest\” retail agent will try and provide the best guess at replacement cost at the time of original purchase. Here in CA, building costs have soared over the last 7-10 years, and even with inflation guards increasing coverages every year, we find that many homes are underinsured still. When we go back to the insureds now, we advise them what we believe it should be and also advise them to seek out a contractor for his estimate and if they do not agree to the increase, we have them sign off on a disclosure form. We are relentless in the ones that do not answer. We will send the same letter every month for 6 straight months. Unfortunately, most of the clients don\’t want to spend any more money on insurance so they take a chance. It\’s amazing how someone can drive around in a 60k vehicle but not want to pay another $100 or so more to cover $100-300k in equity in their own home. As for the Farmers and State Farm and Allstate agents that undercut the replacement cost, I hope it comes back to bite you in the butt someday.