We are on our way to the Alabama's Affordable Homeowners Insurance Commission Forum Meeting. It is being held today from 5:30pm to 8:00 pm in the West Ballroom of the Mobile Convention Center.
There is one issue that we have not seen or heard anyone talking about, that if corrected could actually make a big difference immediately. We hope to have an opportunity to address this issue. It concerns the amount that insurance companies claim is necessary for replacement cost coverage. I am not just stating a problem. I also have a possible solution.
Did you know?
Â· Insurance companies useÂ NATIONALÂ construction costÂ numbers to determine how much replacement cost coverage is needed.
Â· Local construction costs are less than the national average in our area.
Â· Even if you have a low mortgage or no mortgage, in order to have replacement cost coverage on your home,Â insurance companies use numbers that are too high for our area.
Â· MOST homeowners are paying for more insurance than they need.
Â· They use national numbers for how much insurance you need and then they charge you more because you live in Mobile or Baldwin County.
Â· By claiming it would be too difficult to compute local numbers the insurance companies are getting away with highway robbery.
Â· Â Â The excuse that the insurance companies donâ€™t have a better way to determine replacement cost coverage is absolutely no excuse for over-insuring everyone and therefore over-charging everyone.Â
Â· There is no system in place to dispute what the insurance company claims is the replacement cost coverage.
Â· We need a system to dispute the cost to replace.
If your insurance company says it is going to cost $150,000 to replace your house, but you can get a written estimate from a licensed home contractor or appraiser that says the cost the replace your house would be $100,000 and you owe $100,000 or less, you should be able to buy less insurance.