Good afternoon Raj,
I understand your questions are not related to HO insurance. I was only adding feedback based on the current insurance premium figure you used as a measuring stick to estimate costs for a new property.
As for your insurance comments and question:
-Do not confuse market value with replacement cost. An insurance policy cares about how much it would cost to replace/rebuild your home using "like kind and quality" materials. A home can have a sale value of $500,000 or $1 million depending on market conditions, but the cost to replace it will not change. Actually, the cost will steadily INCREASE (even in down markets) due to the rising costs of labor and materials (maybe 2%-4% per year). That's why HO policies have inflation guard endorsements you can purchase, which protects you from these rising costs. Otherwise, you could easily be under-insured only a couple of years after you took out the policy
-There's no way to guess what the premium will be. Too many underwriting factors to consider. Plus, when you start dealing with high valued home insurance companies, you get much more elaborate coverage (e.g. waiver of deductible with $50K+ claims, total loss cash settlement options, etc.) but the premiums are higher for those type of policies as compared to standard policies from State Farm, Travelers, The Hartford, etc. As you can see, you can really pick and choose the policy options depending on your needs, to say nothing of the costs based on your risk factors alone. In short, not all policies are created equally
-You can call the current homeowner to see how much they are currently paying for insurance, but I wouldn't put much stake into that number. We have no idea what their policy looks like to make an accurate comparison
When you have targeted a home and begin the closing process, give me a call if you'd like. We can then thoroughly investigate your coverage options by getting your case in front of a good underwriter.