[Guillermo]

will cost much more than the insured value of their homes.

I'm almost 100% certain you are wrong on this, because a typical homeowners policy is for the replacementvalue of the house.

[steve86]

because a typical homeowners policy is for the replacement value of the house

Replacement to the same standards or new standards?

[dawn53]

You pay for the replacement value listed on your policy (our replacement value is listed for each structure we have, i.e. house, shed, workshop, plus what they would pay to replace furnishings, and pay for rental to live in while rebuilding). At least in Florida that's how it works.

My replacement value was too low, and when I realized it, I had my agent raise the replacement value. Of course, the cost of my policy went up, but in an emergency it would be a pittance compared to what I would lose if I hadn't upped the replacement value.

After Andrew another FUN thing was added to our homeowners.

Every homeowner is not responsible for a 2 percent hurricane deductible on their property. So if your property is destroyed by fire, you won't be charged the deductible, but if it is destroyed by a hurricane, you're responsible for 2% of the homes insured value.

[Puntagorda]

We have insurance on 5 homes in the Punta Gorda, Port Charlotte area, and I can tell you that getting insurance on any home in a Hurricane and Flood zone in Florida is a difficult proposition.

The insurance companies are reluctant to underwrite policies in this area, and only underwrite the value of the existing structure.

Since many of the homes were built in the 60's and 70's (crackbox houses by General Development Company), their value would be under $120,000.

That doesn't mean you can buy homes for $120,000 as the value of most of the homes in this area, especially the waterfront homes, is in the land under the home, not the structure.

So, it is not uncommon for a $350,000 home to only have $100,000 of insurance coverage. And unless that coverage includes wind and or hurricane damage, the insurance may not pay off.

But even if you do have insurance (wind/hurricane), it would usually pay far less than replacement costs - unless the home is relatively new.

Due to Florida's strict hurricane building codes, it will cost at least $180,000 to build a minimal house in this area (add $60,000 to meet Punta Gorda Isles codes).

So those people who do have insurance on older homes (and you'd be surprised at how many don't have insurance), will not get replacement value. They will get the value of the existing structure.

And in most cases, that will leave them well short of what it will cost to build a new home.

Of course with 1,000+ people now needing new homes built, you'll probably have to get on a waiting list.

PuntaGorda

[arthurus]

The typical homeowners' policy dates from when the home was purchased which for many was several years ago and codes have been upgraded close to annually. The only ones who will be decently covered will be the brand new acquisitions; and trailess? forget them.

[beezdotcom]

I'm almost 100% certain you are wrong on this, because a typical homeowners policy is for the replacementvalue of the house.

BWAHAHAHAHA! You've never had somebody you know well lose a house to a storm, have you? Not all policies are for replacement value - and the ones that are are only for replacement value of what you HAD, meaning that they're not going to pay for any fancy upgrades.

I'm still arguing with my insurance company after Isabel's damage last year to raise their settlement to cover the cost of the damage (which is still not repaired). It's like death by a thousand cuts; I've managed to push them up from 30% of what the repairs would really cost now to about 80% of the cost of the repairs. Yeesh!